Due to the volatile nature of cryptocurrencies, they have a habit of making enormous swings during a single trading session. Cryptocurrencies fell dramatically during early trading on Wednesday, wiping off almost $2 billion from the total market capitalization. At the top of the selloff, the total cryptocurrency market capitalization plunged to $450 billion, sharply lower from an all-time high of above $800 billion.
In early Wednesday trading, bitcoin dipped below $10,000 for the first time since early December.
However, bitcoin pared some of the early losses in the evening session, currently trading close to $11,000, lower only 2% from its previous day price. Its price hit the highest level of $20,000 mark on December 17.
Discussing the longevity of bitcoin and other cryptocurrencies, Dick Kovacevich, the chairman of Wells Fargo told CNBC: “I think it’s a pyramid scheme. It makes no sense. I’m just surprised it isn’t even lower. I never called it a fraud because there’s no fraudulent thing going on… the fundamentals make no sense.”
During Wednesday trading, ethereum price also declined below $800 for the first time since the start of this year. Ethereum was among the best performing virtual currencies since the start of this year, amid its wide acceptance and unique features compared to bitcoin and ripple. The concerns related to the potential ban on cryptocurrency trading in South Korea have jolted its price in the last two sessions.
After an early selloff in Wednesday trading, ethereum price recovered the majority of what it had lost. The digital currency is currently trading around $984, down only 1% from the previous close.
Traders’ concerns related to strong regulatory requirements have burst cryptocurrency prices in the last two trading sessions. China has already taken strict actions against cryptocurrency trading, while South Korea is preparing a bill to impose tough regulatory requirements. The option of completely banning the cryptocurrency trading is still open, the South Korean minister said in an interview. Although prices recovered late in Wednesday trading, analysts have a bearish outlook for digital currencies.
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