Crypto-crash: BTC down 10%, ETH 15%, BCH 21% – 4 reasons

Crypto-currencies are not enjoying any kind of Santa rally. Bitcoin, Ethereum, and Bitcoin cash are all crashing quite significantly.

Here are the updates, followed by 4 reasons:

  • BTC/USD is down by over 10% to $14,088, already around 30% below the magic number of $20,000.
  • ETH/USD, which was well above $800, is currently trading around $778, down some 15% on the day. Ethereum has more to offer in comparison to bitcoin but offers also bigger losses today.
  • BCH/USD, or bitcoin cash, is down a whopping 21% to $2,435. The coin, which exists only since August, enjoyed a big leap earlier in the week as it received inclusion in a key exchange.

Why are crypto-currencies crashing?

  • Coinbase was down: During the Asian session, a key exchange, Coinbase, suspended buying and selling of bitcoin and other cryptocurrencies. This is not the first time they experience an outage. While the issue has since been resolved, it shows that trading is vulnerable, and this, in turn, affects the price.
  • Chinese crackdown: A new report in the media in Hong Kong discusses the Chinese clampdown and how it raises demand for over-the-counter trading. Yet this may not last for too long.
  • Ability to go short: The introduction of futures on bitcoin by the CME group on Monday. While going short on bitcoin via options could work as a good hedge and allow further buying of the digital currencies, it also works as a short on its own, putting pressure on the price.
  • Founders are selling: Emil Oldenburg sold all his bitcoins and switched to bitcoin cash. Litecoin founder Charlie Lee, sold all his LTC assets and donated the money.
  • What’s next? We have seen quite a few crashes in crypto-currencies that were followed by rallies. Is this another case?

    The advantage with digital coins is that they also trade during the weekend and also during Christmas. Will Santa eventually bless bitcoin? Or maybe bitcoin cash?

    More: On the Bitcoin Block: 7 Myths about trading cryptocurrencies


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