Cryptocurrency collapse wipes $640bn off notional valuations
The cryptocurrency market plumbed a fresh 10-month low yesterday as Bitcoin's biggest rival tumbled and US regulators suspended trading in two securities linked to digital assets.
Ether, the second-largest virtual currency, slumped 10pc from its level at 5pm New York time on Friday, according to Bloomberg composite pricing. Bitcoin lost 2.6pc, while the market capitalisation of digital assets tracked by CoinMarketCap.com shrank to about $197bn - down almost $640bn from its January peak.
Cryptocurrencies have declined for five of the past six weeks amid concern that a broader adoption of digital assets will take longer than some had anticipated. That worry was underscored over the weekend after the US Securities and Exchange Commission temporarily suspended trading in two exchange-traded notes linked to cryptocurrencies and Ethereum co-founder Vitalik Buterin told Bloomberg that the days of explosive growth in the blockchain industry have likely come and gone.
"The temporary suspension of these products led to an initial knee-jerk reaction," said Ryan Rabaglia, head of trading at cryptocurrency dealing firm OSL in Hong Kong. "But ultimately, it's just another obstacle for the market to overcome."
Cryptocurrencies remained under pressure yesterday despite reports that Citigroup has developed a new mechanism for investing in the space. The US bank plans to act as an agent issuing so-called digital asset receipts, or DARs, to enable trading by proxy without direct ownership of the underlying coins, a person with knowledge of the plans said.
The MVIS CryptoCompare Digital Assets 10 Index of major virtual currencies dropped 2pc as of 12:18am London time, paring a decline earlier on Monday that extended to its lowest level since late October.
Ether has tumbled faster than Bitcoin in recent months.