Image Credit: Yourg/Shutterstock with Coinbase screenshot
Whether it be Bitcoin or Ethereum, every cryptocurrency has suffered massive losses over the past several days. Prices have dropped to as low as 64 percent, bringing the entire cryptocurrency market cap down to $70 billion from $110 billion.
Image Credit: coinmarketcap.com
Ethereum’s price has gone from $400 right down to $151 in about a month, leading investors to panic sell. On the other hand, Bitcoin, which dominates the cryptocurrency market is down about 36 percent from its high (it’s currently trading around $1,894). Investors are finding it hard to hold onto cryptocurrencies at such a low price — especially amateur investors who bought them at a much higher price.
So what is causing the prices to dip so low? Could they go any lower? Could the market rebound from here?
Here are a few possible causes for the recent price tumble:
1. August 1st is looming
The infamous crypto “civil war” is around the corner. The debate on whether or not to increase the Bitcoin block size has been going on for a few of years now, with disagreement between the miners and nodes.
On August 1st, we could see a split, with part of the Bitcoin network supporting a change in protocol and the other part sticking to the current protocol. The result could be a massive devaluation of Bitcoin. This particular concern is making investors nervous, and some are liquidating their BTC into fiat, which could be the cause for this free fall.
As the Bitcoin price falls further, it will take down most of the major currencies with it. It is safe to say August 1st is not only Bitcoin’s independence day, but also a big day for all the blockchain based currencies.
2. Post-ICO “startups” are cashing out
Many blockchain-based companies have managed to raise millions of dollars in ETH — through initial coin offerings (ICOs) without even having a product. Nearly $700 million was raised in total last month through ICOs on the Ethereum platform.
Needless to say, most of these so-called startups are not…
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