The total market value of global cryptocurrencies is $191 billion, a new low since November last year.

Investors' crazy sell-offs have caused cryptocurrency prices to plummet by 70% from January's high, and the general shocks in the cryptocurrency market and the future of speculative investments have left investors in panic.

This week, the total value of the cryptocurrency market has fallen to $200 billion, the lowest since the last November. According to CoinMarketCap, a well-known cryptocurrency data analysis website, 98 of the top 100 cryptocurrencies in the market have fallen in the past 24 hours. However, some holders said that it is normal to sell cryptocurrencies.

The cryptocurrency has similarities to French currency such as the US dollar and the Japanese yen, but it is a digital token that does not require physical infrastructure, allowing users to exchange value online quickly and cheaply. Some proponents believe that cryptocurrency will replace the so-called legal currency. But so far, there have been few other uses besides trading.

As the virtual currency with the largest market value to date, Bitcoin fell below $6,000 at the end of June, while the world's second Ethereum price plummeted 17%. Kyle Samani, a partner at cryptocurrency hedge fund Multicoin Capital, said that in the past two days, “there were too many people panicking the market” and selling cryptocurrencies, which in turn affected others to start selling.

Although the intense sell-off is only a reflection of a few market and economic factors, many holders said that the sharp drop in cryptocurrency prices suggests that Bitcoin, Ethereum and other popular cryptocurrencies are clearly not widely adopted in the economy. Many people believe that although the transaction volume of cryptocurrency is still much higher than last year's level, the current market is a reasonable valuation of cryptocurrency prices.

Others believe that people are increasingly aware that the price of cryptocurrency may no longer be able to return to the high level in January, so most people want to quickly sell cryptocurrency and stop loss in time before there is more damage. Bitcoin and other currency-related financial products failed to gain regulatory approval, and encrypted investors suffered several major property losses this year due to successive incidents such as Asian hacking.

For several months, Mark Grant, chief global strategist at B.Riley FBR Inc., has been warning customers not to put money into cryptocurrency. "People now realize how dangerous it is for them to be extremely enthusiastic about pursuing cryptocurrencies."

The MSCI World Index, the first global benchmark supplier, index data and company information provider, showed that global stock prices reached their highest point in January and have not been able to recover high prices since then. Bitcoin prices are still below the peak of December.

In 2017, investors rushed to bet on cryptocurrencies that have become mainstream. The market for bitcoin and cryptocurrencies has been driven by so-called momentum trading far beyond the fundamentals. The multi-billion dollar ICO has spawned a range of products and services, and Wall Street and “institutional” funds are rushing to get a piece of the pie. Earlier this month, the Intercontinental Exchange Group (ICE), part of the New York Stock Exchange Group (NYSE), announced the launch of Bakkt, a global digital asset platform, using Microsoft's cloud computing solution for the $270 billion digital asset market. Create an open, regulated global ecosystem. However, last month, the Bitcoin exchange-traded fund (ETF) was once again rejected by the US Securities and Exchange Commission, and the ETF's twists and turns in the listing process made people sweat.

More importantly, almost no bitcoin, Ethereum or any other cryptocurrency can be used as a transaction, and there is basically nothing else to do. The cryptocurrency has no practical use in traditional markets and everyday commerce. Mark Grant said that most of the current cryptocurrency market is still in the gray area of ​​regulation, and investors' judgment on the market is more like "gambling."

In 2017, Bitcoin continues to move between bull and bear markets, rising or falling by 20% from peak or valley every month. In December last year, Bitcoin skyrocketed 40% in 40 hours, and then plunged 25% in 24 hours. For investors, it is common for cryptocurrency prices to be volatile.

For investors, many cryptocurrency projects face a severe test. The development of Ethereum was once in trouble. Similarly, EOS, which is considered by Ethereum competitors, also faced many difficulties and challenges. Some projects seem to be very hot, but in fact they are just a few people's bubble carnival, the real number of users is actually very few.

After three years of development, Augur, a predictive market platform based on the Ethereum platform, was launched on the main network in July this year. However, after a commotion caused by the beginning of the line, it failed to make a difference. “Everyone is looking for a killer app,” said Sherwin Dowlat, a researcher at consulting firm Satis Group. "Augur's performance only allows us to pin our hopes on other applications."

On the other hand, it has also been said that there is nothing special about this sell-off, as is the case for the volatile cryptocurrency market.

"Climb, excitement, collapse, and yield, you will all experience it." Kyle Samani, co-founder of cryptocurrency investment company Multicoin Capital, added that this is the fourth time the market has experienced such a clear cycle. Although his company's fund is dominated by long positions, he is already aware of the current situation.

"We are not as sad as you think," he said.

(Source: Wall Street Journal)