In addition to the instability and its downward pressure across the board, The Telegraph notes that the drop in the price of bitcoin may stem in part from the arms race having "drained computing resources away from bitcoin itself, thus reducing the perceived demand for the original cryptocurrency".
According to CoinMarketCap, at press time, Bitcoin [BTC] is trading at $4,628 with a market cap of $81 billion.
Bitcoins are created through a process called computer "mining". The virtual currency has enjoyed a period of relative stability since early September, hovering between $6,000 and $7,000.
"There's a small chance that, it's hard to estimate, that something really bad could happen related to Bitcoin Cash that could then impact the entire crypto market".
The coin's performance may have been additionally affected by the US Securities and Exchange Commission's (SEC) recent ruling regarding two ICO start-ups. And in the murky world of semi-regulated crypto markets, catalysts for the sharp price volatility can be hard to pinpoint.
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It's also common for those same social media stars to buy followers or boost the number of likes or comments on a post with a third-party app.
One of the reasons for the decline in bitcoin value is the split of bitcoin cash - an offshoot of bitcoin - into two different cryptocurrencies, which are now competing with each other and causing turmoil in the cryptocurrency space. The Chicago Mercantile Exchange or CME presented Bitcoin futures trading on December 17. Now, it's the opposite, Bitcoin ABC has 73% of the miners, while Bitcoin SV only 27%.
Ripple (XRP) has been lagging the market but now is coming under heavy selling pressure and is registering a double-digit loss. Airfox and Paragon Coin Inc will each have to pay US$250,000 in penalties to compensate investors, and will also have to register their digital tokens as securities, the agency said in a news release on Friday. And, when trading CFDs on crypto cross pairs and cryptos paired with fiat currencies, traders can profit on market movements in any direction.
Neil Wilson, the chief market analyst at Markets.com said: "The crypto bloodbath continues".
"On August 24 of this year, with Bitcoin around $6,500, I wrote 'we are likely to see Bitcoin near $3,000 before we see Bitcoin at $10,000 again".
Markets are waiting to see whether both versions survive as independent bitcoin-based networks.
Bitcoin was trading on Tuesday at $4,354.20, its lowest level on the Bitstamp exchange since October, 2017.