The price of bitcoin dropped by over 9 percent in the last 24 hours, as it declined from around $9,100 to $8,030. The valuation of the cryptocurrency market, which hovered in the $400 billion region last week, decreased to $336 billion.
Today’s correction isn't exclusive to bitcoin. All major cryptocurrencies including Ethereum, Bitcoin Cash, Ripple, Cardano, and Litecoin have declined in value, at a similar rate as bitcoin. Ethereum recorded a daily loss of 10 percent, while Ripple and Bitcoin Cash both decreased by just over 9 percent.
Some analysts have attributed the decline in price of cryptocurrencies to the ICO hearing participated by US representatives and government officials, in which several representatives including Carolyn Maloney, Representative for New York's 12th congressional district, claimed that the cryptocurrency market is a bubble.
The negative comments of US representatives followed a report released by $81 billion investment firm Allianz, which claimed that bitcoin has no intrinsic value and therefore, could fall in price. “In our view, its intrinsic value must be zero. A bitcoin is a claim on nobody – in contrast to, for instance, sovereign bonds, equities or paper money – and it does not generate any income stream," said the firm’s global economics and strategy head Stefan Hofrichter.
However, the lack of intrinsic argument often brought up by experts in the traditional finance industry has been refuted by both cryptocurrency and technology experts on many occasions, as CCN reported.
The combination of the US ICO hearing, Mt. Gox sell off, overall market performance over the past month, and negative media coverage are contributing to the decline in the value of the cryptocurrency market.
Currently, the media is not portraying the innovative developments being pursued within the cryptocurrency industry, especially the increasing adoption of cryptocurrencies in regions like Japan and South Korea. Last week, CCN extensively reported about South Korea’s largest internet conglomerate Kakao, which operates KakaoTalk, KakaoPay, KakaoTaxi, KakaoStory, and Dunamoo (UpBit), focusing on cryptocurrency development.
In fact, after reports around Kakao integrating cryptocurrencies and introducing the asset class to 12,000 merchants, 200 million KakaoTalk users, and millions of KakaoPay and KakaoTaxi users were released, Kakao invited Cardano creator and Ethereum co-founder Charles Hoskinson to their headquarters in Seoul.
Despite the rising adoption of cryptocurrencies and innovative developments being led by the bitcoin, Ethereum, Cardano, and Litecoin open-source developer communities along with other blockchain projects, the lack of momentum in the price of major cryptocurrencies is fueling the price fall of bitcoin.
Today, on March 14, the price of bitcoin fell dangerously close to the $7,000 region, and given that it dipped below $8,030, it is possible that bitcoin could fall to the $7,000 mark in the short-term, which would be a steep decline from its weekly high at $11,400.
While most cryptocurrency analysts unanimously agree that bitcoin will likely recover in the mid-term, at least in the summer of 2018, it is unlikely that the price of most cryptocurrencies will spike up in the short-term.