Asian Cryptocurrency Company Stocks fall after Bitcoin hits one-year low
Cryptocurrency companies based in Asia saw their shares fall on Thursday after Bitcoin hit its lowest point this year leading to a mass sell-off.
Tokyo based exchange Coincheck and SBI Holdings Inc each fell by more than 2 percent and Seoul based Vidente Co. and Omnitel Inc. fell by at least 7 percent each.
Blockchain-related stocks in the U.S fell earlier on Wednesday with Fintech firm, Ideanomics Inc. reporting a drop of 49 percent which remains the biggest one-day loss in the company’s history since 2010. Chinese Xunlei Ltd. depositary receipts fell by 13 percent.
Why are Stocks down?
Bitcoin, the largest cryptocurrency plunged as much as 15 percent and currently trades at $5,518. Even Ethereum, the second-largest, dropped by 10 percent, hitting a two-month low at $176.95 leading to the mass sell-off.
Also, the capitalization of the entire cryptocurrency market fell below $200 billion as per Coinmarketcap. Other reports suggest the November 15 “hard fork,” or split of Bitcoin Cash might be a cause as well.
Soichiro Tsutsumi, Trader with eWarrant Japan Securities K.K, Tokyo told Bloomberg –
“The $6,000 mark, which had been serving as a floor for a long time, gave way — this feels like a bit of a dangerous sign. Companies most impacted by the price move would be the ones with business models reliant on a client pool, on concern that the number of client accounts won’t expand.”
Rob Sluymer of Fundstrat Global Advisors says –
“Bitcoin’s slump pushes prices into “deeply oversold” territory and suggests it may be due for a short-term rally, however longer-term technical indicators aren’t so favorable. This week’s breakdown produced significant technical damage that will likely take weeks, if not months, to repair to create a durable enough price ‘structure’ to support a multi-month rally.”
Peter Schiff, CEO of Euro Pacific Capital in a tweet says –
“If you think Bitcoin falling to $5,200 constitutes capitulation, think again. Very few, if any HODLers have actually thrown in the towel. Capitulation is a long way off and will come at much lower prices and with far less fanfare, as CNBC will have long since abandon coverage!”
Clearly, there is still not enough “Blood on the streets” in the Crypto market to confidently say that we have bottomed out which means Bitcoin can still go a lot lower than $5400. But this might not be true after new money enters the market with institutional products like Bakkt and Fidelity Custody solutions set to launch in December and January respectively.
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