A market selloff sent prices for bitcoin, ethereum and other cryptocurrencies tumbling Tuesday. Bitcoin was down 12 perecent and trading below $10,000 Tuesday afternoon, according to CoinDesk. Ethereum was down 9 percent while ripple fell 10 percent, according to CoinMarketCap. (CNBC)
Be smart: No one exactly knows what sparked the massive selloff. One possibility is South Korea implementing strict KYC rules for trading cryptocurrencies. (CNBC) Another is the SEC freezing the assets of AriseBank and halting its massive ($600 million so far) ICO. (CNBC) A third regulatory action saw the U.S. Commodity Futures Trading Commission send subpoenas to cryptocurrency exchanges Bitfinex and Tether. The subpoenas were issued in December, but reported publicly for the first time today. (Bloomberg Technology) It’s also entirely possible that this trifecta of bad news had nothing to do with the selloff. Nobody knows for sure.
What’s next: Volatility is the norm in cryptocurrency markets. So this wild ride will continue. Just remember the regulators are not going away either. The size and volatility of these markets have caught their attention. And there are going to be more regulatory actions in the future.