The slide cryptocurrencies accelerated on Monday, with bitcoins having pierced the US $ 5,000 mark for the first time since October 2017, due to speculation that greater regulatory scrutiny will push issuers of initial money offerings to liquidate holdings.
Bitcoin fell 9.1% to $ 4 958, falling for an eighth consecutive day in what is the longest series of losses recorded for the 10-year digital token. The so-called alternative coins collapsed even further, with the ether falling to 13% and the litecoin crater up to 14%. XRP, the token associated with ripple, was the solitary gainer among the major digital currencies.
On Friday, the SEC announced its first civil sanctions against two cryptocurrency companies that did not register their initial money offerings as securities. Airfox and Paragon Coin will have to pay $ 250,000 in penalties to compensate investors and will also have to register their digital tokens as securities.
"The selloff is related to the application, which is almost certainly under way," said Justin Litchfield, chief technology officer at ProChain Capital. "Plans will be made to return investors' money, which, after spending a lot of money marketing their 100 million dollar ICO in a lavish party roadshow that was the norm for this ICO vintage, will be tough ".
The speculation that the selloff was triggered by the SEC ruling could be exaggerated. Many of the ICOs have already emptied their wallets and probably converted their cryptocurrency into fiat, according to the researcher Elementus.
Volatility returned to cryptocurrencies, with the biggest tokens losing billions in market value since last week's bitcoin money debut. This happened when two software development factions failed to find a way to update the offshoot of the original bitcoin, leading to a cyber power arms race.
Loss of $ 660 billion
The cryptocurrency sector lost more than $ 660 billion in value from a January peak, according to CoinMarketCap.com. Bitcoin is down more than 70% from the December 2017 high, data show.
Thomas J Lee, managing partner of Fundstrat Global Advisors and long-encrypted, has cut his year-end price target for bitcoins to $ 15,000 from $ 25,000. The goal is based on a multiple fair value of 2.2 times the break-even the cost of mining, which the company sets at $ 7,000, according to a report from last week.
Bitcoin bulls might be able to take courage in some technical measures. Based on the GTI Global Strength Indicator, the bitcoin is flashing for the first time since August, and its oversold level of this year. In addition, he is testing his Fibonacci level of 23.6% at five years of $ 4 727 as the next support.
"It's always the suspicion that you guess the cause of short-term price movements, but it seems likely that much of what's happening now is that ICOs try to liquidate all their cryptocurrencies in cash to make it through the goods before the SEC it fell on them, "said Bram Cohen, co-founder of the Chia digital currency proposal, who is planning an initial public offering. – Reported by Vildana Hajric, with the assistance of Kenneth Sexton, Eric Lam and Olga Kharif, (c) 2018 Bloomberg LP