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article imageOp-Ed: Prices of cryptocurrencies take a dive

By Ken Hanly     Sep 5, 2017 in Business
The price of major cryptocurrencies plunged over the last few days in the biggest sell off since mid-July when the total value of the currencies fell from $72 bilion to $63 billion a drop of 12 percent.
On Friday September 2 the total value of publicly traded cryptocurrencies was down from a recent high of almost $180 billion to around $166 billion a drop of more than 7 percent. Bitcoin went from a high of $5,013,91 to a low of 4,619. 97 or a decline of more than $250 dollars.
On Monday September 4 declines continued. Bitcoin went down to $4,140. One reason for the decline is that the People's Bank of China has declared initial coin offerings (ICOs) illegal and demanded that such fundraising be halted immediately. The Bank has determined that more than 90 percent of recent ICOs are in violation of fundraising laws. There has been a huge number of Chinese ICOs of late: In the first six months of 2017, Chinese investors have pumped 2.6 billion yuan (USD 394 million) in ICOs, a government study said. The study further assumes this number to be much larger as it did not include sales through private placements, as per Caixin.
While the Chinese investors in cryptocurrencies are suffering huge loses the main western currencies, bitcoin, ethereum, and litecoin also suffered declines on Monday.
The second-ranked currency etherium appears to be reviving. Ether the coin associated with etherium, having clocked a fresh three-week low of $270 levels earlier today, is now trading at roughly $305. This means ether is down 12.85% week-over-week, although, on a month-on-month basis the digital currency is holding 16.76% gains. So, on a larger scheme of things, the trend still appears bullish. On the year ether is up over 3,000 percent.
Bitcoin also appears to be recovering from its decline as it began to increase in value again today, Sept. 5: " Pushed lower by Chinese regulations today, the cryptocurrency bottomed out at $4,037.50. At the time of writing, bitcoin was trading up 0.83 per cent at $4,355.55." With the rapid rise in value of many of the main cryptocurrencies prices may be due for a correction in any event before any further rise. The quick return to an upward trend may be a sign that investors are still generally bullish on the currencies. However, the next few days may show that this was just a temporary move up before the currencies continue downwards from their highs It remains to be seen how many investors are waiting in the wings to jump in on any significant price declines. Perhaps they are already entering the market.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com
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