Bloodbath. After an incredible three months rise from $10 at the beginning of the year to a high of $217, ethereum fell to a low of $116 yesterday within hours as the market experiences one of its biggest crash to date.
Ethereum’s market cap is down $6 billion to $14 billion, with all digital currencies covered in red, down 20%, 30%, as a sell-off ensued across the board yesterday, seemingly led by bitcoin which has seen its price fall by $1,000 in just one day.
What caused the crash no one can really say for sure, but there appears to be a number of contributing reasons. Price was increasing very quickly across the board, with ethereum becoming one of the top trending words in Google searches for America.
The world’s focus turned to this space following three conferences, starting with Ethereal summit, then the biggest blockchain conference so far, Consensus, which was trending on twitter for the first time ever for any blockchain related event, and then the Token Summit.
Then Dan Bilzerian, who has some 20 million Instagram followers, told them he bought a lot of bitcoins which some took as the sign of a bubble top as they may have been wondering who else was left to buy after his followers.
So a brutal sell-off ensured at an incredible speed. Bitcoin went down $500 in minutes, and then down further. Ethereum followed with the two digital currencies moving in lockstep since yesterday through their ups and downs.
Which may lead some to wonder whether this is more of a bitcoin crash than an ethereum crash, a fact we won’t quite know for some time. Nor is it clear whether the market has turned in a more medium time-frame, or whether it is just a temporary cooling off.
But one thing is clear. Digital currencies remain a very high risk investment, although stock markets have also seen crashes of same magnitudes. So only a small portion of your savings should be invested in this space, with long standing wisdom stating that you should diversify to different asset classes.
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