Commencing Friday, 1st September, the cryptocurrency market saw a huge correction and by the end of the weekend approximately 11% down. The correction was worsened by China as they declared a temporary ban on Monday on the craze of issuing digital coins, fueling the market correction.
According to the CoinMarketCap.com, the gross value of around 866 digital currencies saw a noticeable decrease to $US 180 billion on Saturday followed by a decline to $US 160 billion on early Monday morning.
The correction was coming, as growth met 80% in the month of August itself. According to CEO and founder of Crypto Compare, Bitcoin reached $US 5,000 on some exchanges and the market was terrified with the traders who withdraw short-term profits.
Bitcoin fell to $US 4400 on the index of Crypto Compare BTC USD. Markets will most likely suffer from the sudden declination and volatility, which will put the market into the vicious cycle of unpredictability. Bitcoins contribute 5 per cent of regularity to market rotations.
A senior analyst associated with the trading platform, Mati Greenspan told the sources that the price has already been cascading since the month of July around 16th July. This small amendment has pushed us back to the costing that we retrieved from the previous week.
However, due to this correction in cryptocurrency, the market will observe a basic reduction in business and economic activities. Looking at the market conditions, the Central Bank of China already declared an addition to its rules on initial coin offerings.
ICOs, wherein the business startups tend to issue their digital coins to raise capital, actually has helped the fuel market to see a sudden sweep in the cryptocurrency market till now in 2017. The total amount raised by ICOs has reached over $US 1.5 billion. In other words, the coin offerings got a joy ride on the back of Ethereum cryptocurrency, which in turn helped to accelerate its valuation in record time and value.
Mati Greenspan told Business Insider that “I don’t expect that all these market conditions will influence the Bitcoin price much as the entire story is different altogether. It can actually affect the Ethereum price and again it depends on how long they will deal with it. China majorly contributes to the ICO market and along with US they are trying to reinforce their rules, which could certainly leave an impact.”
ICOs actually have turned out to be a goldmine for entrepreneurs who deal with digital currency all over the world and China, helping them to increase huge sums of funds quickly by creating and then selling the digital coins with no or less strict rules.
We shall see what happens after China releases its temporary ban, perhaps more regulation for this new and somewhat unknown adventure?