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Cryptocurrencies Undergo Christmas Correction as Market Cap Plunges $190 Billion

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The global cryptocurrency market is undergoing a massive correction Friday, as bitcoin and the top-20 coins plunged at least 20% each. The massive decline follows weeks of unprecedented growth that took the global market cap well north of $650 billion.

Cryptos Plunge

The combined value of all cryptocurrencies in circulation has plunged nearly $190 billion since Thursday, according to CoinMarketCap. At $464 billion, the market cap is at the lowest level since Dec. 12.

Trade volumes exceeded $43 billion over the past 24 hours, with bitcoin accounting for nearly 47% of the daily transactions.

Bitcoin’s Dramatic Decline

The violent selloff was triggered by a 23% correction in bitcoin that sent prices below $12,000 on the Coinbase GDAX exchange. At press time, bitcoin was down 14% to $13,385. The decline shaved tens of billions of dollars from bitcoin’s market cap, which now stands at roughly $220 billion.

It was only last week that BTC/USD was testing new highs near $20,000 as rallied behind the introduction of bitcoin futures. But we wrote earlier, institutional investment is no guarantee that bitcoin will continue higher in the short term. The success of the derivatives contracts could depend on whether the so-called ‘bitcoin billionaires’ embrace these new markets. As it currently stands, about 1,000 investors hold roughly 40% of all bitcoin in circulation.

Altcoin Universe

All the major altcoins suffered huge losses Friday, a sign that the broader market was still following bitcoin’s lead. There were no immediate catalysts for the decline, which suggests that investors were taking profits after the record build up in recent weeks. As veteran cryptocurrency traders would attest, huge price swings in the market is fairly common.

Below is a recap of the major losers on Friday:

Cryptocurrency Price Daily Loss
Ethereum $662 15%
Bitcoin Cash $2,345 25%
Ripple XRP $0.9550 8%
Litecoin $193 36%
IOTA $3.82 25%
Cardano $0.3440 27%
Dash $856 25%
NEM $0.7617 21%
Bitcoin Gold $206 32%
Monero $293 31%

Despite the recent price collapse, 2018 is expected to be a huge year for cryptocurrency as more institutions embrace the alternative asset class. On Thursday, Goldman Sachs Group announced it was entering the cryptocurrency market. According to Bloomberg, the bank’s crypto traading desks should be ready in time for summer.

There’s also evidence that bitcoin derivatives contracts will continue to proliferate as Nasdaq gets ready to join CBOE and CME in offering futures trading. Recent activity at the Securities and Exchange Commission (SEC) also suggests more firms are lining up to offer bitcoin exchange-traded funds (ETFs). According to the SEC’s public filing system, two companies have recently submitted applications to launch a bitocin-based ETF.

 

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock. 

 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 462 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Stellar Lumens Update: Acquisitions and Retirement Accounts

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Stellar Lumens is in the headlines this week amid reports that it is negotiating to acquire a high-profile startup by the name of Chain. Meanwhile, a bitcoin IRA that lets users buy cryptocurrency for retirement added XLM to its list of available assets, potentially raising the investment appeal of the Stellar protocol.

Stellar Eyes Chain Acquisition

Fortune reported Wednesday that Stellar has been in talks to buy the San Francisco-based blockchain startup for $500 million. Citing anonymous sources, the report said the payment would be made in XLM, the seventh-largest cryptocurrency by market capitalization. No cash or equity will be part of the sale, which has yet to be finalized.

Although Stellar’s plan for Chain is not yet known, its interest in the startup is tied to its team of talented blockchain developers. Stellar founder and crypto trailblazer Jed McCaleb has a keen eye for talent, having founded Mt. Gox, eDonkey and Ripple XRP.

Chain develops enterprise-grade blockchain solutions, including ledger products that allow businesses to transfer funds in token format. The company raised over $43 million in venture funding from high-profile investors including Visa, Nasdaq, Citi Ventures and Blockchain Capital.

It is not entirely clear how the purchase would impact XLM’s market value. For current investors, the main concern is a wholesale dump of Lumens by Chain’s backers in the event that the sale actually takes place.

At a current price-per-coin of less than $0.23, the Chain acquisition would translate to roughly 219.3 million XLM. There are roughly 18.7 billion Lumens in circulation, giving the currency a total market cap of $4.3 billion.

Stellar for Retirement

The BitcoinIRA retirement platform has announced the addition of both Stellar Lumens and Zcash to its available list of cryptocurrencies, giving investors the ability to diversify their crypto holdings for retirement.

“[W]e’re excited to meet the high demand for both Stellar Lumens and Zcash in the marketplace by making these coins available to customers looking to diversify their retirement portfolios,” said Chris Kline, BitcoinIRA’s Chief Operating Officer.

In addition to Lumens and Zcash, the BitcoinIRA platform allows retirement planners to access bitcoin, Ethereum, Ripple, Litecoin, bitcoin cash and Ethereum Classic.

Crypto IRAs fall under a much broader category of assets called digital IRAs, which are self-directed retirement accounts. Cryptocurrencies are recognized by the IRS as property, which allows for their inclusion in retirement accounts. Self-directed IRAs have unique tax benefits that can help investors maximize their digital currency holdings.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 462 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Three Reasons XRP Is Not a Security: Ripple’s Garlinghouse

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Ripple CEO Brad Garlinghouse was a featured panelist at the CB Insights Future of Fintech conference in New York today. Chief among the themes in the discussion was XRP, the No. 3 cryptocurrency based on market capitalization in which Ripple owns the majority of tokens.

While the No. 1 and No. 2 digital currencies, bitcoin and Ethereum, respectively, were cleared from being regulated as securities, Wall Street regulators have yet to make a call on XRP.

“I think it’s really clear XRP is not a security,” Garlinghouse said in the session.

There is a misconception in the cryptocurrency community that Ripple controls XRP. In fact, XRP is a decentralized digital currency that Ripple uses in its cross-border payments product xRapid. They could just as easily use bitcoin except “ bitcoin transactions on average are 45 minutes in and 45 minutes out. So XRP is uniquely positioned to solve the cross-border liquidity problem,” Garlinghouse said. 

He went on to outline a trio of reasons why XRP should never be identified as a security.

  1. “If Ripple as a company shut down tomorrow, the XRP ledger would continue to operate.”  
  2. “If you buy XRP, you’re not buying shares of Ripple.” As a holder of XRP, you’re not entitled to dividends or equity. Even though Ripple owns more than half of XRP, it doesn’t give them control of the currency, he said, comparing it to the dynamic between Saudi Arabia and oil. “Saudi Arabia owns a lot of oil, but they do not have control of oil.” 
  3. Utility. “XRP is solving a problem. There’s no security in a utility,” he said, adding that he “looks forward to the SEC clarifying some things.

Crypto Exchanges

Garlinghouse was diplomatic about cryptocurrency exchanges like Coinbase that have yet to add XRP to their trading platforms. In recent weeks, Coinbase announced that it would begin supporting Ethereum Classic (ETC), while many in the cryptocurrency community have been wondering when the U.S.-based exchange will add support for XRP.

“XRP is listed on 75 exchanges around the world. It has expanding liquidity … The consumer speculator is not our target market. Our target market is financial institutions that we can solve big problems for,” Garlinghouse noted.

Crypto Rivalry?

Yesterday Ethereum Co-Founder and ConsenSys Founder Joseph Lubin, who was included among the panelists, took a swipe at rival coin XRP, suggesting it is “massively overvalued.” The same question was posed to Garlinghouse during his session about Lubin’s ConsenSys. Garlinghouse took the high road, saying he was “excited” about them, adding they’re “underrated.”

XRP is the third largest cryptocurrency, boasting a market cap of $21 billion compared to more than $53 billion for Ethereum and $115 billion for bitcoin. Garlinghouse’s outlook is that at least one bank will be using it by year-end.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 16 rated postsGerelyn has been covering ICOs and the cryptocurrency market since mid-2017. She's also reported on fintech more broadly in addition to asset management, having previously specialized in institutional investing. She owns some BTC and ETH.




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Calm Prevails in Crypto World as Bitcoin Runs Up Against Resistance

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Cryptocurrencies resumed their rangebound trading Thursday, as bitcoin’s relief rally showed signs of stalling while Ethereum and the major altcoins were held to break-even.

Market Update

The combined value of all coins and tokens in circulation is $287 billion, virtually unchanged from the overnight hours.

Bitcoin touched a session high of $6,790.25 but was unable to extend its rally past $6,800. The bulls have been rejected at this level on at least three occasions since Tuesday, a sign the relief rally was losing steam.

The largest cryptocurrency by market cap bottomed around $6,133 on June 13. At the time, the short-term technical indicators supported a further breakdown in price, with $5,900 seen as the next likely target.

Ethereum prices were up a mere 1% Thursday to $534. ETH/USD values reached an earlier high of $542.74, which was not unlike the high from Tuesday.

The major altcoins ranked between nos. 3 and 10 by market cap were virtually unchanged compared with 24 hours ago.

Digital currency prices have shown remarkable progress in terms of stability, as total market values fluctuated within a $4 billion range through the overnight session. Twenty-four hour trade volumes have held just above $12 billion, according to CoinMarketCap.

Bithumb fell to the no. 9 spot based on total volume after the exchange shut down deposits and withdrawals in the wake of a $31 million cyber heist. The exchange has processed $181 million worth of cryptocurrency trades since early Wednesday, which is roughly half of the previous day’s turnover.

In Search of Direction

While cryptocurrencies have exhibited rare price stability over the past nine days, it is too premature to conclude that the bears have relinquished control of the market. The total market is down a whopping 38% from the April swing high and volumes have declined by more than half over that period.

With the exception of the recent attacks on South Korean exchanges, the latest crypto headlines have been mostly positive. If they can be summed up in one theme, it would likely be the growing institutional interest in cryptocurrency.

The San Francisco-based Coinbase exchange has been leading in that capacity by announcing the arrival of crypto custodial services. Goldman Sachs-backed Circle and BitGo are also in negotiation with regulators about launching similar services. Meanwhile, Wall Street custodians JPMorgan Chase & Co and Bank of New York Mellon Corp are reportedly working on custody services that could facilitate digital currency transactions.

While promising, these developments alone won’t be enough to generate the next crypto bull market. For institutional capital to be the driving force of the next major market uptrend, actual custodial services and not merely the promise of them must be deployed.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 462 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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