During the last 24 hours, cryptocurrency market has been falling, the top 10 digital currencies such as Bitcoin, Ethereum, Ripple, Bitcoin Cash and other show the decrease within 15-20%.
From the 15th of January, the market value of cryptocurrencies has dropped from $700 billion to $500 billion during 48 hours. During the last several hours the market shows first signs of restoration since the market capitalization of all cryptocurrencies has increased to 530 billion dollars.
- coinmarketcap.com data.
The affirmation that Bitcoin has gone down with an insignificant difference when smaller cryptocurrencies have considerably lost in value is false. Top cryptocurrencies have fixed more critical value losses than smaller ones.
Bitcoin has decreased with a lesser gap than Ethereum, Ripple, and Bitcoin Cash, but its losses are significant as well. From December, Bitcoin dropped from $20 000 to $11 000.
It is also incorrect to explain the recent fall of the cryptocurrency market capitalization by the plans of the Chinese government to limit the access to the centralized cryptocurrency exchanges in China and by the prohibition of anonymous trading in South Korea. Chinese government forbade cryptocurrency trading as far as September 2017. The present volume of the Chinese market can hardly influence the global cryptocurrency situation.
A lot of investors are concerned by the state of the market because of the sharp fall in currency prices. However, cryptocurrency market experiences 20-30% corrections on a regular basis. For instance, when the Public Bank of China and Chinese government banned the ICO in September, one could observe Ethereum fall to 30%.
Two months earlier, Ethereum had lost more than 50%, falling from $360 to $134. However, considering all mass corrections of Bitcoin, Ethereum, and Bitcoin Cash during the last several months, the latest correction is the biggest one.
When the coin market capitalization exceeded $500 billion in the middle of December, a co-founder of Ethereum Vitalik Buterin emphasized that he doubted the price of the majority of projects on the market. He asked whether the market and those projects had done enough to justify the capitalization of $500 billion. Although Buterin stated that Bitcoin and Ethereum had provided a sufficient amount of services for the publicity, they still didn’t do enough to explain their market capitalization.
So the general volume of the cryptocurrency market has reached 0.5 trillion dollars. But did we earn it? The answer to all these questions is not zero evidently, and in some cases the achievements are considerable. But this is not enough to say that the level of significance has reached 0.5 trillion dollars. Not enough!
– said Vitalik Buterin, sharing same thoughts with other Ethereum co-founders Charles Hoskinson, IOHK.
A massive correction is useful for the market which is overloaded with the meaningless projects. There are many blockchain projects without a ready product that have received a multi-billion value from the users because of some poor documentation.