You’ll forgive us for saying this (actually you won’t if you’re a crypto proponent) but it kind of feels like this is the beginning of the end for the cryptocurrency craze.
On Tuesday, we and pretty much every other financial news portal, whether mainstream or “fringe”, documented the carnage that began overnight and continued throughout the U.S. session.
There didn’t appear to be a “proximate cause” or specific catalyst for the move. Rather, it seems as though China’s crackdown on miners and renewed effort to stamp out the last vestiges of exchange trading coupled with South Korea’s on-again, off-again push to put the brakes on what officials quite clearly believe is a speculative mania has cast a pall over the market. Sentiment has taken a decisive turn for the worst and soundbites from the likes of Warren Buffett (who last week said he’d be willing to bet against “every one” of the cryptocurrencies) haven’t helped matters.
What was already a rapidly deteriorating situation got worse on Tuesday evening, with Ripple falling to as low as $0.87. That’s a 75% drop from the highs:
For its part, Bitcoin dipped below $10,000 on at least one exchange, down 50% from its December peak:
Exacerbating the situation was the following announcement from Bitconnect:
This is to inform all community members that we are closing the Bitconnect lending and exchange platform. We are closing the lending operation immediately with the release of all outstanding loans. With release of your entire active loan in the lending wallet we are transferring all your lending wallet balance to your BitConnect wallet balance at 363.62 USD. This rate has been calculated based on last 15 days averages of the closing price registered on coinmarketcap.com. You are free to withdraw your BitConnect coin currently in QT wallets that was used for staking as well. We are also closing BCC exchange platform in 5 days. In short, we are closing lending service and exchange service while BitConnect.co website will operate for wallet service, news and educational purposes.
In the decision, Bitconnect cited a pair of Cease and Desist letters from the Texas State Securities Board and the North Carolina Secretary of State Securities Division which both warned the company that it is not allowed to sell securities in the states. Bitconnect also cites “outside forces” they say “have performed DDos attacks on the platform several times”.
Obviously, that doesn’t bode well for crypto-related businesses as it seems to suggest that state regulators are now set to take aim in an effort to protect the public amid the frenzy.
Finally, no less than Jeff Gundlach took to his at times inflammatory Twitter account this afternoon to deliver the final insult. To wit:
Boom. Nothing further.
What can you say? Reality attack!
Can’t wait to buy more of them sweet space tokens!