On Monday, Ethereum regained the title of second most valuable cryptoccurency after rival asset Ripple held its ground for roughly a week. Just within 24 hours after CoinMarketCap, a leading global index of digital currency prices, adjusted its listed data by removing a group of Korean cryptocurrency exchanges from its price calculations, the total cryptocurrency market capitalization crashed by more than $150 billion.
It's been a fierce battle for silver in the cryptocurrency world in recent days. More traders see bitcoin's price headed higher rather than lower, with 49 percent expecting bitcoin to finish 2018 at a price of at least $20,000.
We will expect Bitcoin to be the market's litmus test for risk appetite this week as investors grapple with the South Korean government's chatter on regulation, with the markets likely to have been a little too sensitive to the comments.
We've talked about regulatory risk being the key driver for the markets, following the impact of South Korean government chatter on the cryptocurrencies late a year ago.
Analysts said bitcoin was also undermined by news earlier in the session that South Korean financial authorities were inspecting six local banks that offer virtual currency accounts to institutions.
"Right, might be useful to notify people of things like this before or as you execute to avoid crashing the market, thanks", one investor wrote on Twitter.
"The most obvious point is how undeveloped the ecosystem supporting bitcoin and cryptocurrency trading still is", said ABC Bullion chief economist Jordan Eliseo. This makes it impossible to value using conventional metrics and therefore could be worthless, or may rise to $5 per Ripple coin in the future.
Investors interested in cryptocurrencies should beware of the 20% drop of Ripple, an alternative to Bitcoin.
The year 2017 may forever be known on Wall Street as the year of bitcoin. The introduction of futures trading allows for betting on and against Bitcoin prices, and market data now indicates many investors are preparing to speculate for a fall in the price of Bitcoin.