Cryptocurrency is trading 70 percent lower than January highs amid frustration on the part of investors that it has taken off as a payment method and moved out of more speculative investments.
According to a report in The Wall Street Journal, for the first time this week the value of all digital tokens that are in circulation fell below $200 billion and stands at the lowest since November. The selling on the part of investors has been across the board, with CoinMarketCap reporting that during the past 24 hours, 98 of the 100 top cryptocurrencies were down trading lower.
Bitcoin, which is the leading cryptocurrency, dipped below $6,000 this week which marked the first time since June. Meanwhile, second place digital token Ether declined 17 percent over 24 hours, reported the Wall Street Journal, citing CoinDesk.
The reasons for the sell-off are varied but users are pointing to the inability for bitcoin, ether and other cryptocurrencies to gain widespread adoption, which many view as necessary for the valuations to be justified. Others point to a realization that prices may not ever reach the highs saw in the early part of the year, which is prompting to sell before the losses are even greater. The lack of regulatory approval for some financial products focused on bitcoin is also hurting the market, noted the Wall Street Journal.
There have also been hacks of cryptocurrency exchanges that are worrying some investors. “People are starting to realize that they drove this stuff up in a feeding frenzy, and they’re starting to realize just how dangerous it is,” said Mark Grant, chief global strategist and managing director at B. Riley FBR Inc., who has been warning clients against investing in cryptocurrencies for months now. The rise in the dollar and a continuing growing of the U.S. economy is prompting investors to focus elsewhere, noted the report. Grant said investors are judging the cryptocurrency market more like gambling.