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Jan. 17, 2018, 3:58 p.m. EST

5 key reasons bitcoin, other cryptocurrencies have lost a stunning $370 billion in 10 days

Fear, uncertainty and doubt are crushing bitcoin

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By Mark DeCambre, MarketWatch

Getty Images
Bitcoin is under pressure—again.

The No. 1 digital currency and its cohort continued to unravel Wednesday, extending a downturn that has seen the entire sector cough up a whopping $370 billion since Jan. 7, or more than 40% of their total value.


For its part, bitcoin /zigman2/quotes/31322028/realtime BTCUSD +0.37% has shed almost half its value since a single bitcoin traded at an all-time high just below $20,000 in late December.

What’s dragging down a sector that had enjoyed stratospheric gains (bitcoin alone is up about 1,100% since last January) even compared against the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.11% , the S&P 500 index /zigman2/quotes/210599714/realtime SPX -0.06%  and the Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP -0.09% , which boasts returns between 22% and 30% over the past 12 months?

Read: 7 cryptocurrencies to watch in 2018 if you’re on the hunt for the next bitcoin

Here’s a quick rundown of the factors contributing to the carnage:

1). South Korea

Seoul has said that the government intends to crack down on the trading of cryptoassets. Officials have also floated the idea of taxes on crypto trading and other measures to tighten its grip on market considered by some as supporting money laundering and dangerous speculative investing. By some measures, South Korea represents about a fifth of the virtual-trade volume.

2). Russia

Russian President Vladimir Putin said on Tuesday that more oversight of cryptocurrencies may be needed “This is the prerogative of the Central Bank at present and the Central Bank has sufficient authority so far. However, in broad terms, legislative regulation will be definitely required in future,” he said, according to Russian news agency TASS .

3). China

Beijing, which already has taken a hard line against the bitcoin community, which uses computing power to support the network and create new bitcoin through mining, has said it also is exploring further regulations or restrictions around digital-asset trading.

4). Bitconnect $BCC

The cyber currency known as Bitconnect, which has long drawn a critical eye from cryptocurrency investors because of its use of loans and the manner in which it solicits new investors, shut down. Bitconnect also promised a return of a quarter of a percentage point daily. Its currency, the Bitconnect coin, plunged by 94% after the announcement :


5). Bitcoin futures

Tough debut for bitcoin futures
Bitcoin futures on the Cboe have lost more than 40% in the past 30 days.

Futures for bitcoin on exchange platforms are set to expire this month. January bitcoin futures on Cboe Global Markets Inc. /zigman2/quotes/208166986/composite CBOE +1.51%  were set to expire on Wednesday, down 42% over the past 30 days at $10,447, while those trading for the same month on the CME Group Inc. /zigman2/quotes/210449693/composite CME -0.63%  are due to expire on Jan. 26. Those futures also are down about 42% at $10,455. Expiring futures contracts, in theory, can add to volatility.

Click to Play

Here are some cryptocurrencies to watch in 2018

7 cryptocurrencies to watch if you are on the hunt for the next bitcoin.

US : CoinDesk
+62.56 +0.37%
Volume: 0.00
Dec. 2, 2022 3:24p
US : Dow Jones Global
+36.98 +0.11%
Volume: 0.00
Dec. 2, 2022 3:25p
-2.63 -0.06%
Volume: 0.00
Dec. 2, 2022 3:25p
US : Nasdaq
-10.24 -0.09%
Volume: 3.79B
Dec. 2, 2022 3:25p
US : U.S.: Cboe BZX
$ 128.73
+1.91 +1.51%
Volume: 213,737
Dec. 2, 2022 3:24p
P/E Ratio
Dividend Yield
Market Cap
$13.45 billion
Rev. per Employee
US : U.S.: Nasdaq
$ 176.77
-1.13 -0.63%
Volume: 1.87M
Dec. 2, 2022 3:25p
P/E Ratio
Dividend Yield
Market Cap
$64.00 billion
Rev. per Employee

Mark DeCambre is MarketWatch's markets editor. He is based in New York. Follow him on Twitter @mdecambre.

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