Recently on Monday some Chinese regulatory agencies released a joint statement in which they confirmed that initial coin offerings (ICO), a cryptocurrency based fundraising method, are illegal in the country, which caused the entire market for digital currencies under pressure.
ICOs market have been growing these years enormously with some firms using the fundraising technique to raise millions of dollars in some minutes without actually offering any product. The Wall Streeters have been calling the market a bubble.
To raise cash through an ICO, a company issued a new digital currency that can either be spent within its ecosystem, a bit like Disneyland dollars, or used to power part of the business.
Since the opening month of this year, $1.8 billion has been raised via ICOs, according to an email from the financial technology analytics provider Autonomous NEXT.
On Monday morning Sebastian Quinn – Watson of Blockchain Global, a bitcoin exchange operator informed Business Insider in an email that the news out of China is an “absolute win” for cryptocurrency community because it will intrude out illegitimate ICOs.
Still, the 15 largest cryptocurrencies by market cap are all down more than 6% since yesterday, according to data from Coinmarketcap.com .
The fifth largest cryptocurrency Litecoin is down more than 15% at $64 per coin after have a high rate of more than $80 on Friday. On the other contrary, bitcoin is lower by close to 7% at $4340. Bitcoin surpassed the much anticipated benchmark for the first time on Saturday.
The Ethereum is down nearly 16% at $288 per token. As a whole the market for cryptocurrencies has shed over $20 billion since Friday.
Who knows it maybe an apocalypse and an end to the era of these virtual currencies.