Overall Cryptocurrency Valuation Now Below $300 Billion, Bitcoin Below $7000
The bloodbath in the crypto markets continues further as the overall market valuations have now slipped below $300 billion and Bitcoin has now gone way past below $7,000. The correction has swept past across the entire crypto market as we can see on our index that every cryptocurrency has corrected by nearly 10% in the past 24 hours.
It seems that the recovery for the market anytime soon is difficult as many banking institutions have joined in the controlling the liquidity flow in the crypto markets which has resulted in reduced purchases.
Over the past one month, there are several factors that have contributed to the heavy correction of the crypto markets which started with South Korea imposing several regulatory measures in crypto trading activities within the country.
Moreover, over the last weekend, a few banking giants from the Wall Street like JP Morgan, Bank of America and the Citi Group announced that they are terminating transactions made to crypto exchanges through their credit cards. Just yesterday, Europe’s Lloyds Banks Group also joined these banks by terminating purchases made by credit cards. While speaking to Reuters, a Lloyds spokesperson said: "Across Lloyds Bank, Bank of Scotland, Halifax and MBNA, we do not accept credit card transactions involving the purchase of cryptocurrencies.”
The banking institutions say that they are not ready to take credit risks associated with crypto purchases as many have observed that investors are making purchases beyond their repaying capacities. The banks are also giving reasons like credit cards thefts which have been used for making crypto purchases and hence the transactions become non-traceable.
However, one more reason that has caused a major correction in last 24 hours is China hitting yet another hammer on crypto purchases. The Chinese government has now completely banned local investors from making crypto purchases even if they are done through foreign exchanges.
The South China Morning Post, affiliated with the People’s Bank of China (PBoC) was quoted saying: “To prevent financial risks, China will step up measures to remove any onshore or offshore platforms related to virtual currency trading or ICOs. ICOs and virtual currency trading did not completely withdraw from China following the official ban … after the closure of the domestic virtual currency exchanges, many people turned to overseas platforms to continue participating in virtual currency transactions.
“Overseas transactions and regulatory evasion have resumed … risks are still there, fueled by illegal issuance, and even fraud and pyramid selling.”
Bitcoin has corrected by more than 50% in last one month and the global sentiment for the cryptocurrency seems to be shedding away slowly. It will be interesting to see as to how the crypto markets will take further shape ahead from here.