Bitcoin, Ethereum, and all other major cryptocurrencies are taking a pummeling today. BTC is at $8,234, down 16.3 percent in the last 24 hours, and Ethereum is at $858, down a whopping 23 percent in the same time period, according to CoinMarketCap.
The correction is likely due to the onslaught of bad news regarding cryptocurrencies in the last couple of months. China has banned cryptocurrency trading in September. South Korea implemented stricter cryptocurrency trading rules this week. India’s finance minister said Thursday the country’s government will take measures against cryptocurrencies being used as payments.
There’s also mounting doubt whether Tether, a cryptocoin that’s pegged to the price of U.S. dollar and allegedly backed in U.S. dollars at a 1:1 ratio, is in fact a scam. Potentially scammy Bitconnect was shut down in January. Weeks ago, hackers made away with more than $420 million worth of cryptocurrency, stolen from Japanese exchange Coincheck. And a lot of prominent investors, from Warren Buffett to Peter Boockvar, recently expressed skepticism towards cryptocurrencies.
Add to that the fact that cryptocurrencies typically fare bad in January, and that the Chinese might be selling their coins ahead of the Chinese new year, and you’ve got a perfect storm of news that can cause even the most resilient cryptocurrency to plummet.
The light at the end of the tunnel could be the immense amount of money and brains that has poured into crypto in recent years, and the fact that Bitcoin has always bounced back from previous corrections. Right now, though, everyone seems to be too busy hitting the “sell” button to think about that.
Disclosure: The author of this text owns, or has recently owned, a number of cryptocurrencies, including BTC and ETH.