The crypto world had not been good for last couple of weeks. Even though the prices are on the rise now, in just ten days, cryptocurrencies lost $370billion!
Here are the top reasons behind this loss,
In recent weeks, the South Korean Justice Minister Park Sang-ki said the government was preparing a bill to ban trading via cryptocurrency exchanges. South Korea will make a decision on a proposed ban on cryptocurrency exchanges after “sufficient consultation and coordination of opinions,” the country’s government said Monday.
The South Korean government intends to crack down on the trading of cryptocurrencies. As well as clamping down on crypto trading, they have also expressed a wish to add taxes these, among other measures to tighten the grip on the market that has a lot of doubt. There are some who see the trading of crypto currencies, as a way of supporting money laundering and dangerous speculative investing.
South Korea accounts for one fifth of the trading of cryptocurrencies, so this crackdown would have made a massive difference.
The Russian President, Vladimir Putin has openly said that he is not against cryptocurrencies; however, he believes more oversight is needed. He said;
“This is the prerogative of the Central Bank at present and the Central Bank has sufficient authority so far. However, in broad terms, legislative regulation will be definitely required in future.”
China also contributed to the cryptocurrency crash and China Escalates Crackdown on Cryptocurrency Trading.
They have long had a bit of a love-hate relationship with cryptocurrencies, and Beijing, who uses computing power to support the Bitcoin network and create new Bitcoins through mining, has also said that they are exploring further regulations and restrictions around crypto trading.
Cryptocurrency BitConnect has long been criticised because it uses loans, and it is known for soliciting new investors, but it certainly contributed to the cryptocurrency crash shut down.
It promised a return of a quarter of a percentage point daily, but in reality, the BitConnect coin actually plunged by a massive 94% after the announcement.
Any futures on Bitcoin exchanges are set to expire this month. The January futures on Cboe Global Markets were set to expire on Wednesday had suffered a massive 42% loss over the past 30 days.
The futures on the CME Group, are due to expire in just seven days time, and they are also down about 42%. These can all add to the volatility and would definitely have contributed to the crash.