Bitcoin, Ripple, And Litecoin Prices Crash After Coinmarketcap Action

Updated on

Bitcoin, ripple, and litecoin values crash as a major index removes South Korean Exchange prices without any warning.

The Cryptocurrency Problem

Cryptocurrencies like bitcoin, ripple, and litecoin are newcomers to the investment arena. As investment opportunities with no real-world ties, the value of the currencies are simply based off of supply and demand. While traditional stocks rise and fall with the performance of a company, for example, bitcoin, ripple, and litecoin spike and plummet due to things as inconsequential as rumors.

For many traditional investors, bitcoin, ripple, and litecoin represent a risk that isn’t worth taking. The advent of cryptocurrencies have made it easier for the average person to get started in making money through investing, but it’s also far easier to lose that money as well. In the past couple of weeks, the price of bitcoin had skyrocketed to almost $20000, which far exceeded any expectations that experts had for the currency in 2017. Starting at just over $1000, an almost 20x increase for the cryptocurrency was extremely unexpected and drove thousands to start investing – hoping to get started with their investments before the price continued to balloon higher and higher. Investment experts warned of the currency’s volatility, however, and many people’s hopes were dashed after a crash down to almost $15000 in the course of just a few days. It’s safe to say that cryptocurrency like bitcoin, ripple, and litecoin are anything but a safe investment.

The legitimacy of these currencies has been called into question, with countries like China and Israel skeptical over whether allowing trading of bitcoin, ripple, and litecoin is advisable given the associated risks. Recently, a leaked document suggested that China was considering raising taxes on Bitcoin farms within the country’s borders. This revelation spells troubles for the various cryptocurrency mining groups that call the country home due to the low prices of electricity, and strikes yet another blow to investors in the country after shutdowns of cryptocurrency exchanges and the development of a plan to ban Initial Coin Offerings (ICOs). Israel has also expressed concerns over the lack of regulation with currencies like bitcoin, ripple, and litecoin, and the future of currencies in the country has been put on pause as the country’s financial institutions work to establish some modicum of regulation over these unprecedented investment opportunities. Bitcoin is perhaps the biggest target of various governments’ ire, due to the wide public recognition and gigantic market cap.

The cryptocurrency market cap could be in trouble however, after a massive crash for bitcoin, ripple, and litecoin on Monday. While all three of the currencies have seen massive growth in 2017, it’s clear that their future is anything but certain.

Bitcoin, Ripple, and Litecoin Crash

Prices in South Korea’s exchanges for currencies like bitcoin, ripple, and litecoin are normally up to 30 percent higher than in other countries, and when major cryptocurrency global index CoinMarketCap removed Korean exchanges from their calculations, the site caused a huge crash. Many investors were anxious and angry following the removal, which led to a major sell-off that impacted Ripple the most, with a reduction in value of 25%.

Korean exchanges that were excluded in the price data include Bithumb, Coinone, and Korbit. With the amount of impact these exchanges have on bitcoin, ripple, and litecoin price, it’s no wonder that the crash was as big as it is.

On Twitter, Coinmarketcap released a statement explaining their reasoning for the exclusion, saying that “[they] excluded some Korean exchanges in price calculations due to the extreme divergence in prices from the rest of the world and limited arbitrage opportunity…we are working on better tools to provide users with the averages that are most relevant to them.”

Whether these exclusions were warranted is up for debate, but the total market capitalization of more than 1300 cryptocurrencies fell from $830 billion to $669 billion – a crash of 20 percent. Bitcoin cash, ripple, and litecoin took the most damage, which a price drop of 13 percent, 25 percent, and 11 percent respectively. Bitcoin dropped seven percent and was trading at $15215.

Bitcoin, ripple, and litecoin remain some of the largest cryptocurrencies despite this large drop, but the crash reinforces the idea that these investment opportunities are a huge risk. With nothing to tie their value to, the removal of the South Korean markets on a single website can have catastrophic consequences.

Leave a Comment