- Crypto prices continue to drop, and Bitcoin has fallen below the $6000 unofficial floor to below $4500
- There are a few reasons why crypto prices have dropped, including SEC handing out penalties to ICOs
- This price drop has spooked investors in the crypto space
Cryptocurrency prices are plummeting once again. What’s worse is that no one knows how far or how long it will continue to collapse. The latest collapse has affected even established cryptocurrencies such as Bitcoin. Last week Bitcoin dropped below the $6,000 mark, which many considered as the unofficial floor. In the last 2 days, the price of BTC has continued to drop, currently sitting at some $4400.
Perfect storm of factors
Many experts think that there are 3 events that have caused the latest collapse in cryptocurrency prices. Firstly, the SEC made an announcement about 2 Initial Coin Offering operators that sold unlicensed securities. They were fined and asked to pay restitution. In addition, Crypto Bros were antagonizing the SEC back in 2017. Now that SEC is meting out punishments, and a lot of people think that this is just the beginning of the SEC smackdown. But, this will no longer come as a surprise since some have already predicted that this was coming. Due to these events, however, some cryptocurrency investors might feel weary about whether to continue or not.
Another reason for why crypto prices continue to tumble is the Bitcoin Cash fork a week ago, and how it could greatly affect the crypto market. The fork has caused concerns about the apparent centralization of Bitcoin Cash. As a result, it brought a negative effect on Bitcoin Cash’s price that has spread to rest of the market.
This leads us to the third possible reason which is that many investors are worried about the negative news coming from Nvidia and Advanced Micro Devices. The report about the steep sales declines in cryptocurrency equipment such as GPUs, suggests that interest in crypto has diminished.
It could also be that all three reasons combined caused the drop in cryptocurrency price. If so, this could mean that individual shocks caused the drop. Therefore, the market could still recover.
The Biggest and Most Controversial Reason of All
Another possible cause is a conspiracy theory that the whole price drop is because crypto is finally dying. According to tech exec Sam Gellman, for the past 2 years, “cryptocurrency has sucked up $30 billion in ICO money”. Gellman has shared this idea in a series of tweets saying that Bitcoin has been in the industry for 10 years yet there’s little of value to show for it.