Bit coin

[Angrboda]

Cryptocurrency investors woke up to grim news Wednesday: A brutal sell-off sent prices crashing across the board, wiping more than half a trillion dollars off the market.

Bitcoin, the most popular and valuable token, fell by more than 20 percent in early morning trading before recovering some of its losses. It sank below price levels not seen since January. Many other top tokens followed suit. Dogecoin investors, who had enjoyed astronomical growth this year, seeing their holdings skyrocket by roughly 10,000 percent, were hit especially hard. The meme-inspired cryptocurrency tumbled by more than 30 percent.

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“What is causing this violent sell-off? Take your pick!” said David Bahnsen, chief investment officer of the Bahnsen Group, a wealth management firm. Bahnsen pointed to a confluence of factors and negative headlines that may have triggered the event. One possible factor was billionaire executive Elon Musk saying that his company Tesla would no longer accept bitcoin as payment for its vehicles and that the company might have already sold its bitcoin holdings. Another factor could be the renewed fears of ransom-taking criminals using cryptocurrency to carry out their plans. What’s more, Chinese officials signaled they would crack down on financial institutions that offer services tied to cryptocurrencies, Bahnsen said, pouring water on the whole concept.

“But at the end of the day, it drops like this for the same reason it previously skyrocketed the way it did — it is primarily held by rank speculators who lack a thesis for ownership rooted in fundamentals or reality or some definition of value. Speculation cuts both ways and reflects weak hands when things turn south.”

(Washington Post)