Bitcoin Retraces Back to $4,000 after China’s ICO Ban

The news about the notice from a committee led by the Chinese central bank for an immediate ban on all ICO fundraising has caused serious economic damage. The digital currency market has taken a tumble for the worse and many popular digital assets plunged down about 20 percent.

If we take a quick look at the Bitcoin chart below we can get an idea for how big of a retracement Bitcoin has gone through  in the last 48 hours. BTC touched down to $4000 today (-10%). Even though this sounds bad, keep in mind Bitcoin saw a 58 percent rise in August alone.

The digital currency market has lost about 20 percent of its total market cap in the last 48 hours. The combined digital market including Bitcoin was at $180 billion over the weekend, setting new all time high records but quickly dropping to $142 billion.

The cryptocurrency community speculates that the reason why we are seeing this crash is due to the recent ICO ban in China, stating that they have “seriously disrupted the economic and financial order”. Though, every time we have seen a SEC warning, or a government tries to regulate Bitcoin, we typically see a little bit of a backlash like this. In the meantime, some investors view the situation as a digital currency sale.

This article was first posted on Etoro.com/blog: Our Premium Trading Partner.

About the Author

Avner Meyrav

@ccn.com