Cryptocurrency exchanges suffer a setback
The lack of ability to trade may seem insignificant, but it has a more lasting effect on the industry as a whole.
There have always been doubts regarding the reliability and validating of digital currencies, but we’ve seen a surge in their popularity in recent years with a growing number of sectors working with cryptocurrency as a payment method. However, although infrequent, there are occasions where things don’t go to plan.
Most recently, Binance and Coinbase, which provide a top-tier cryptocurrency exchange list for users to trade their digital currencies, saw technical issues arising as a result of an increase in trading volume. The vast majority of cryptocurrency marketplaces have crashed or are experiencing major issues with their systems, resulting in potential real losses for users.
While many will speculate as to what has caused this issue, it’s clear that dips in the market capitalization all relate back to the recent rejection of Bitcoin (BTC) at the $12,000 threshold for the third month in a row, leaving traders wondering what the short-term trend for the currency will look like.
Bitcoin, being the pioneer of the crypto sector, clearly has great sway over the industry as a whole. As of the close of play on the 1st of September, the market capitalization of cryptocurrencies was at close to $406 billion, but within 24 hours it has seen a downtrend resulting in losses of 6.1% – now valued at $382 million.
Practically the entire industry was hammered as a result of the downward slope. Bitcoin has lost 4.5% of its value in 24 hours, while the second-biggest cryptocurrency Ethereum is down 4.7%. While smaller currencies like XRP, Chainlink, and Polkadot are also suffering big losses, somewhere between 6%-11%. Some currencies were unaffected, but on the whole, the series of rejections faced by Bitcoin are having a knock-on effect on the industry as a whole.
Crypto is an unstable market at the best of times; the lack of trust regarding digital currencies from state governments continues to be an issue, as well as the fact legislation for crypto is so unclear and remains a hot topic of contention for governments across the globe. But it’s not just the currencies, it’s the framework that supports them that is suffering in this latest Bitcoin setback. The popular US brokerage platform Coinbase, which has been highly influential in the progress of the crypto sector, announced that the sending service for a range of currencies had gone down – 25 listed cryptocurrencies available for trade on the platform.
The lack of ability to trade may seem insignificant, but it has a more lasting effect on the industry as a whole. Broadly speaking, all facets of the cryptocurrency industry need to be conveying confidence to new users and satisfying the needs of those that already subscribe. It remains unclear what has caused such a stir in the crypto world, but early speculation points to the Korean cryptocurrency Bithumb, which was raided by police for alleged fraudulent token trades. This is the kind of attention the industry could do without. More will become clear in the coming days.
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