November will be the month that the investors in the Bitcoin will want to forget quickly. The world’s biggest cryptocurrency ended the month with a fall of 37%, which is the worst performance since April 2011, when the virtual currency price dropped by about 39%.
The Bitcoin reached the level of 3878.66 USD on Friday after it topped 6300 USD at the beginning of November. The price of the digital currency has now dropped by more than 70% since the beginning of the year and by 80% of its highest level at the end of last year. The market capitalization of all major cryptocurrencies collapsed by 70 billion USD in November. The price of Ripple, which is the world’s second largest cryptocurrency, fell by 18% in November, while the Ethereum wiped out 43% from its value over the same period.
For Bitcoin, this performance is a sharp reversal over relatively stable October. The cryptocurrency was trading close to 6,400 USD without much volatility, while the global financial markets reported declines.
It’s unclear whether this is bottom or a short consolidation period before the next move down, but buyers still keep some money in the sidelines if the price drops further.
There is a strong interest from the buyer at the level of 4,000 USD in cash.
What caused the drop?
It is hard to determine the reason for the extremely strong decrease in cryptocurrencies. Generally, this is a “civil war” as a result of the Hard Fork in the Bitcoin Cash, which is linked to a change in the crypto protocol. All Bitcoin Cash coins must upgrade their software to create new blocks if the requirements are changed.
History suggests that the hard forks in the Bitcoin, which led to the emergence of new currencies, such as Bitcoin Cash and Bitcoin Gold, had a positive impact on the prices of all digital coins. Almost every time after the breakdown of the block in new currencies, there was an appreciation of the major ones.
However, the situation went differently this time. The crypto community cracked after the hard fork and split between supporters and offenders of Bitcoin Cash hard fork. This formed some kind of “civil war” within the community and outflow of investors. The trust in Bitcoin and Altcoins decreased and
The digital currencies received support from Wall Street’s key figure – Jeffrey Sprecher, chairman of the New York Stock Exchange and CEO of its parent company ICE. Despite the news on the first pages of the newspapers about the collapse of cryptocurrencies, Jeffrey Sprecher said they have a future on regulated markets.
The Intercontinental Exchange (ICE) supports a version of futures on a Bitcoin through a startup, called Bakkt, which will start operating in January. Nasdaq and VanEck also confirmed that they plan to market products with multiple cryptocurrency products that include futures on the Bitcoin in the first quarter of next year.
Meanwhile, the US Securities and Exchange Commission (SEC) has announced its first civilian sanctions against founders who have not registered initial coin offerings (ICO), increasing punishments against fraud in the growing digital industry. Last week, the agency has signed an out-of-court agreement with professional boxer Floyd Mayweather and music producer DJ Khaled, who allegedly made ICO without telling investors they received a promotional fee.
Bitcoin transactions with record high in Venezuela
Venezuelans continue to find refuge in cryptocurrencies and especially the mainstream digital assets like Bitcoin (BTC). According to data, the transactions in BTC in the country reached 1,284 BTC (5.1 million USD).
The president of Venezuela, Nicholas Maduro last week raised the minimum wage in the local fiat current, Bolivar (VES) by 150%. In addition to that, the president went ahead to devalue the Bolivar by 40% using a Dicon exchange evaluation and assessment. This caused growth in the county’s crypto, Petro, which appreciated from 3,600 Bolivar to 9,000 Bolivar.