Cryptocurrencies resumed collapse on Monday, with Bitcoin approaching the $ 5,000 threshold for the first time since October 2017, following a division of one of the largest major tokens and greater regulatory control of token offerings initials.
Bitcoin fell 6.1 percent to $ 5.119, while the so-called alternative currencies fell even further, with Ether losing 12 percent and litecoin cratering up to 13 percent. XRP, the token associated with Ripple, was the solitaire gainer among the major digital currencies. The Bloomberg Galaxy Crypto index dropped 78.4 percent to a one-year low on a closing basis.
The SEC announced its first civil sanctions against two cryptocurrency companies that did not register their first money offerings as securities. Airfox and Paragon Coin Inc. will have to pay $ 250,000 in penalties to compensate investors, and will also have to register their digital tokens as securities, the agency said in a press release dated 16 November.
The issuers were invited by the US Securities & Exchange Commission to provide reimbursements to investors, raising concerns that other companies that have used sales revenues to finance projects may be forced to do the same.
Volatility has returned to cryptocurrencies, with the biggest tokens losing billions in market value since last week's Bitcoin Cash debuted last week. This happened when two software development factions failed to agree on a way to update the offshoot of the original Bitcoin, leading to an arms race. Read how the battle with Bitcoin Cash is costing billions to investors
The cryptocurrency sector lost more than $ 660 billion in value from its January peak, according to CoinMarketCap.com. Bitcoin is down more than 70% from the December 2017 high, data show.
Thomas J. Lee, a longtime encrypted managing partner of Fundstrat Global Advisors, has cut his year-end price target for Bitcoin to $ 15,000 from $ 25,000. The goal is based on a multiple fair value of 2.2 times the breakeven cost of mining, which the company sets at $ 7,000, according to a report from last week.
"The crypto-specific events have led to greater uncertainty in the cryptography market, including the tough setback for Bitcoin Cash," Lee said in the statement. The breakdown of Bitcoin under $ 6,000 "has led to a renewed wave of pessimism," he said.