If traders were both disappointed and scared after Bitcoin fell under $10,000 last Thursday, things are much worse nowadays, as the market’s (still) most important cryptocurrency, is trading just over $7,000.
Basically, it went down with around 17% in the past 24 hours, and 38% in the past week. The coin has also fallen 65% from its all-time high, of almost $20,000, reached by the end of December 2017.
The perfect example of how news can control a market
This situation occurred after a series of ‘bad news’ hit the cryptocurrency world. Recently, a series of important banks, including Bank of America, Citigroup and JPMorgan Chase announced that they will not allow buying Bitcoin, as well as other digital assets, with their credit cards, being joined by Lloyds Banking Group this Monday.
And this is definitely a very serious issue, as more than 18% of Bitcoin buyers used their credit cards to acquire coins, according to Forbes, citing a poll conducted by LendEDU. Even though the percentage is far from being overwhelming, a potential ban on using credit cards for such purchases could put a big dent in demand.
The really bad part about this potential ban is that 22% of those who used credit cards to buy Bitcoins did not pay off their balance, so they won’t just lose money on their purchase, but also end up paying a high-interest rate, as the asset keeps falling in value.
Let’s not forget about those who bought Bitcoin at an earlier date, as they aren’t in a very bad situation. Still, considering the fact that the price might be dropping even more in the near future, most of them could be looking at a very big loss.
The entire market looks to be going down
Other currencies were also seriously affected, as Ethereum is now trading at $723.96, with a total market cap of over $70 billion. Completing the top 3 is Ripple, now trading at $0.719 and sporting a market cap of over $28 billion. The latter is basically back to the price from mid-December, just before it went on a serious growing streak and reaching $3.50 at the beginning of January.