Cryptocurrencies lose a third of value
NEW YORK: The cryptocurrency Cassandras are starting to look right.
The sector has lost about a third of its market value since peaking in early June, pushing it into what traditional equity market analysts call a bear market.
Bitcoin, the largest of the digital currencies, is down about 20 per cent from its peak of US$3,000 (RM12,880), reached June 12. Smaller rivals such as ethereum and ripple are getting hit even harder.
“When we look for signs of excess in the market, I look at bitcoin and to me that looks pretty scary,” said Richard Turnill, global chief investment strategist at BlackRock Inc.
Whether the virtual currencies were caught up in an asset-price bubble was debated as the market capitalisation of the sector soared this year, raising scepticism from pundits including tech billionaire Mark Cuban.
Backers such as Ripple chief executive officer Brad Garlinghouse, whose money-transfer company is tied to the thirdlargest cryptocurrency by market value, said he isn’t convinced.
Digital coins are currently worth around US$80 billion, down from a market capitalisation of US$100 billion on Friday and US$115 billion on June 14, Coin- marketcap.com data shows.
This week’s slump coincides with initial hearings in the trial of the former head of MtGox, the bankrupt Japan-based bitcoin exchange.
Chief executive officer Mark Karpeles pleaded not guilty on Tuesday to charges of embezzlement and inflating corporate financial accounts.