Bitcoin and other cryptocurrencies continued their bad month on Wednesday, with prices for the most famous coin falling below $7,000 once again. Analysts blamed the stock market slump, as well as the prospect of more regulation from Russia, as the reasoning behind the downturn.
Prices of Bitcoin, Ethereum, Ripple, Litecoin, and Bitcoin Cash all fell by six to seven percent over the last 24 hours, according to pricedata from CoinMarketCap. Some of the smaller alt-coins like TRON, VeChain, and Binance Coin saw double-digit drops over the last day.
“I think that there is a big connection in the way that people are managing their portfolios and the cryptocurrencies have been increasingly correlated with the stock markets especially in the last few weeks,” eToro analyst Mati Greenspan told CNBC. “This (comes) as more and more brokers add bitcoin, the liquidity bridges are being built.”
The link between Bitcoin and the stock market is one that’s being increasingly touted. Yesterday, Wall Street “Bond King” Jeffrey Gundlach told Reuters that “Bitcoin keeps leading,” and its use as an indicator for markets is more than just a “gut feeling” now. ““Bitcoin closed at the low of the year last week, SPX (Standard & Poor’s 500 Index) is now at the low of the year this week,” he said.
A link between Bitcoin and the conventional stock markets will be a mixed bag for crypto-currencies. Some investors, particularly the original crypto evangelists, only liked Bitcoin in the first place because of its decentralized decoupling from the currency and bond markets, and will view any link between the two as a poisoning of the well. For others, linking the markets is the only way to control volatility and help cryptocurrencies become more accepted.
In other cryptocurrency news, Russia became the latest country to toy with the idea of strong regulation of cryptocurrency trading. According to TNW, the deputy head of Federal Financial Monitoring Service told a conference that “the practice of free exchange of cryptocurrencies is not used anywhere in the world, even in jurisdictions with less strict regulations,” and that “it should be noted that this issue is being actively discussed.”