Regulatory pressure on the global cryptocurrency market has continued to negatively impact the value of nearly the entire virtual currencies. The entire cryptocurrency market capitalisation dropped to $308.303 billion in the first week of February from a peak of $830 billion it recorded on 7 January. That loss also meant that over $500 billion in market value has gone bust.
Bitcoin, the largest cryptocurrency in the world by market capitalisation dropped more than $11 billion to $106 billion. The price of bitcoin briefly dropped to a record low of $5,957 on Monday, 5 February, only to recover at $6,679.58. It was the first time in twelve weeks (since November 13) the cryptocurrency is seeing such lows.
As at the time of writing, the price of a bitcoin was at $7,029.98 on the Coinmarketcap Index, representing a slight recovery.
In Nigeria, bitcoin volumes dropped to N1.505 billion on the last week of January from N1.763 billion it recorded the previous week.
Apart from bitcoin, the other nineteen of the top twenty cryptocurrencies on the Coinmarketcap Index was a sea of red numbers on Tuesday morning. Tether, at 14th position, was the only virtual currency that saw growth as the time of writing. The altcoin saw a 0.20 percent recovery in the space of one hour.
Ripple (XRP) the third most valuable cryptocurrency and which was the toast of investors at the beginning of the year, declined to $0.6 from an all time high of $3.84 on 4 January, representing over 80 percent slide. Nevertheless, Ripple remains one of the most sought after digital currency with over $1.131 traded within twenty four hours.
Ethereum which saw an all time high of $1,432.88 on 13 January traded around $577 on Tuesday, marking a near 60 percent decline in a few weeks, according to the Coinmarketcap.com data. It was exchanging hands at $630.44 as at the time of writing.
The biggest loser in the top 100 cryptos by market capitalisation, according to Coindesk, is the Ethereum-based token called dent (in 75th place). The company aims to liberate mobile data by enabling users to sell or donate excess data via the Ethereum blockchain.
British banking group Lloyds increased pressure by banning customers’ credit cards from buying cryptocurrencies. The ban extends to several of its major subsidiaries such as Halifax, MBNA and Bank of Scotland.
The decision followed the lead of a similar ban placed by four US banking giants JP Morgan Chase, Bank of America, Capital One and Citigroup. The ban was aimed at protecting customers from running huge debts from buying virtual currencies on credit.
Mastercard, the world’s second largest payments network disclosed that customers buying cryptocurrencies with credit cards fuelled a one percentage point increase in overseas transaction volumes in the fourth quarter.
The bans, however, extend only to credit card purchases, with debit card users still able to buy cryptocurrencies.
On Tuesday evening, the US Senate Banking, Housing and Urban Affairs Committee held a hearing about the risk of cryptocurrencies. A major worry for investors has been the rumours that Tether was being used to manipulate the US dollar in order to drive the price of bitcoin upwards.
Tether is a cryptocurrency that released in 2015 as peg to the US dollar. The idea is that it is much more stable than most digital coins that have huge price swings. The originators believe that using to buy other cryptocurrencies allows users to move fiat in and out of an exchange more quickly and cheaply. The US Committee is hoping to uncover whether there has been incidences of manipulation that could explain the surge in prices of virtual currencies like bitcoin.
The People’s Bank of China is also reportedly planning to block all platforms related to cryptocurrency trading and the issuance of ICOs.
In the same vein, the Indian Finance Minister Arun Jaitley also said “Bitcoin is not a legal tender” and that the country wants to “eliminate” the use of cryptocurrencies. The government said it is planning to set up a panel to analyse cryptocurrency issues. The panel will submit its report by March 31st.