More than 800 cryptocurrencies are valueless owing to the drop in cryptocurrency value over the past year. Bitcoin has fallen roughly 70% since its record high last year at $20,000. Many cryptocurrencies projects have been trying to get and often failing to get in on the action. This type of behaviour draws many similarities to the dot-com bubble in 2000.
There some digital tokens created using the process known as the initial coin offering where a startup can offer crypto tokens that investors can buy so that ICO coins may offer high returns in the future. The ICOs have raised more than $3.8 billion and in 2018 that number has grown to $11.9 billion.
While Bitcoin still holds the biggest share of value by market capitalization it also had a tough year with the price of each coin falling more than 70%. The fall may be due a number of reasons:
Two South Korean cryptocurrencies being hacked. A major South Korean based cryptocurrency exchange was also hacked with more than $30 million worth of cryptocurrencies being stolen. Bitthumb used to be one of the busiest exchanges for cryptocurrencies. The Seoul-based operator said on Twitter that the stolen coins would be covered from Bithumb’s own reserves and that all users’ assets are being transferred to safer cold wallets.
Another factor that could have affected the market may perhaps be due to the amount of ICO scams that were in operation, these were no different from many other scams, by promising that a product will deliver far more than it will in reality. Most cryptocurrency scams would promise an ICO going on sale for a bargain price which promises huge returns for a relatively small investment.
Hacking aside, it would seem that many of the governments have played a big part in the price drops, with Asia being the first to clamp down on cryptocurrency trading, other western countries have also voiced their concerns and are introducing regulations to avoid cryptocurrency being seen as a safe haven for criminals wishing to launder their ill gotten gains.
While the cryptocurrencies are under a lot of pressure there is an optimism that regulators could boost the investment in the cryptomarket. The CEO of BitMEX said to FAST MONEY that Bitcoin could climb to $50,000 by the end of this year.
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