The bear market has reached a 10 month low after the the biggest rival to Bitcoin falls and US regulators are suspended trading in two securities linked to virtual assets.
The second largest cryptocurrency, Ethereum, slumped just under 9% on Friday and Bitcoin lost just over 2%. The market cap of virtual assets shrank to $197 billion, according to CoinMarketCap.com.
Over the past six weeks, cryptocurrencies have slowly sunk amidst the concern that a broader adoption of virtual assets will take some time longer than some had expected.
This concern was then struck over the weekend following the US Securities and Exchange Commission suspending trading in two exchange-traded notes linked to digital currencies. Vitalik Buterin, the co-founder of Ethereum told Bloomberg that the days of big surges in the blockchain industry have most likely been and gone.
The head of trading at the cryptocurrency dealing firm OSL in Hong Kong, Ryan Rabaglia said:
“The temporary suspension of these products led to an initial knee-jerk reaction. But ultimately, it’s just another obstacle for the market to overcome.”
Cryptocurrencies were under stress on Monday despite reports that Citigroup Inc had developed a new mechanism for investing in the space. The US bank aims to act as an agent, issuing virtual asset receipts, nicknamed DARs. This plans to enable trading through proxies without having a direct ownership of the underlying coins, as said by a person with knowledge of the plans.
In recent months, Ethereum has dropped a lot quicker than Bitcoin due to worries that blockchain firms are selling second best digital currency. Several startups that raised Ether from traders in their original coin offerings will need to sell their holdings at some point in the future to cover the expenses in development, salaries etc.