In about three hours, $13 billon of value was wiped out of the crypto market as the values of major digital currencies plunged. Bitcoin dropped by roughly 5 percent and Ethereum and XRP dived by more than 10 percent at around 10:30 a.m. HK/SIN time, CNBC reported.
Ethereum, XRP and bitcoin are far from their highs. Bitcoin, for instance, was valued at $6,242.10 as of 9:38 a.m. on Thursday (Oct. 11) – and in 2017, by comparison, it was worth nearly $19,783.21 on Dec. 17. The difference marks a drop of over 68 percent.
Today’s drop happened as financial authorities are warning about a possible economic threat. In a recent report, the International Monetary Fund noted that “continued rapid growth of crypto assets could create new vulnerabilities in the international financial system.” At the same time, the U.S. Securities and Exchange Commission (SEC) has turned down bitcoin exchange-traded funds (ETFs).
The end of this month, Oct. 31, 2018, will mark the 10th anniversary of the day that a link to a paper authored by Satoshi Nakamoto was first publicly circulated, describing the digital currency called bitcoin. And Jan. 3, 2019 will mark the 10th anniversary of the first bitcoin block that was mined by Satoshi, giving birth to the notion that a digitized, anonymized currency sent over a permissionless, distributed ledger could democratize how money would move between people and parties around the world.
Ten years after bitcoin launched, it remains the go-to currency of criminals and a way for cybercrooks to wash their money – that is, when it’s not being bought by speculators as a digital lottery ticket. Seventy-five percent of bitcoin transactions are the result of miners moving money between themselves and speculators trading it; the transactions that it powers are nefarious in nature, at best.
Bitcoin’s processing operation is highly concentrated within a handful of miners in China — which is getting more concentrated now, since the price of bitcoin has crashed and fewer players can afford to keep the lights on (literally, since bitcoin processing requires a massive amount of electricity).