Bitcoin Drops 20 Percent in Three Days
After a spectacular bull run in 2017, sentiment for Bitcoin appears to have switched this year. The price of the cryptocurrency went down by 40 percent in 2018, 20 percent of which was lost in a span of three days.
A bear market was among the many considerations when investors bought the cryptocurrency. However, the price free fall currently being experienced by the digital currency market can be attributed to a number of factors none of which are economic in nature.
Last month, the news that South Korea is looking to ban crpytocurrency exchanges triggered a massive sell off that slashed a massive chunk off cryptocurrency prices. While the country – one of the biggest market for digital currencies – revealed that they are not planning to prohibit trading cryptocurrencies, they are considering a total ban on exchanges operating in the country.
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A second blow was delivered to Bitcoin and other cryptocurrencies after Facebook announced that they will be banning any and all cryptocurrency advertisements. This is in order to stem the rise of shady companies looking cash in on the crypto-craze by releasing unscrupulous cryptocurrencies or investment schemes involving such currencies. The ban affects promotions for crypto-exchanges, initial coin offerings (ICO), anything connected to digital currencies, even those from legitimate companies.
"We want people to continue to discover and learn about new products and services through Facebook ads without fear of scams or deception," Facebook's product management director Rob Leathern said. "That said, there are many companies who are advertising binary options, ICOs and cryptocurrencies that are not currently operating in good faith."
The one-two punch left cryptomarkets in tatters, suffering from new lows on the first of February as nearly every digital asset is down 3-20 percent. Many experts see this downward trend as cryptocurrencies begin their search for their fair market value after the "bubble" saw their prices skyrocket exponentially over the course of a few months.
