The cryptocurrency market crashed on Thursday with bitcoin plunging to a five-week low. The broad sell-off followed Google’s plan to ban cryptocurrency advertising the day before.
It took more than 24 hours for the crypto market to react to the news, but major cryptocurrencies saw double-digit percent losses on Thursday.
Bitcoin slid 13 percent to $7,950 for the first time this month. The second-largest cryptocurrency ethereum fell below $600 – losing over 57 percent in value since peaking above $1,400 at the beginning of the year.
Ripple and bitcoin cash both tumbled by more than 13 percent. All but two of Coinmarketcap’s top-100 cryptocurrencies were trading lower on Thursday.
On Wednesday, Google announced it would ban all cryptocurrency ads “including but not limited to initial coin offerings, cryptocurrency exchanges, cryptocurrency wallets and cryptocurrency trading advice.” The move followed the same decision by Google’s main advertising rival, Facebook, which had announced the ban in January.
The cryptocurrencies were also probably weighed down by last week’s news that the US Securities and Exchange Commission (SEC) had warned investors that cryptocurrency exchanges were not regulated.
However, the Thursday’s fall in cryptocurrencies has shown that the market reacts on bearish news either belatedly or it acts independently from the news at all. There has been speculation that a small number of big investors are colluding on manipulating prices.
Under the so-called pump-and-dump strategy, a specific asset is pushed hard and investors are promised large returns. After prices peak, the owners and early investors quickly sell as many shares as possible, while the others lose. This is not illegal since the cryptocurrency market is not regulated.