Cryptocurrency markets have been gripped by panic selling overnight, though there appeared to be no single reason for the latest dip.
Prices varied wildly between exchanges, but Reuters reported Bitcoin had lost a quarter of its value at the peak of the slump, though it appeared to have recovered slightly since.
It was a sea of red across most cryptocurrencies - given many are tied to Bitcoin - and online forums were full of investors questioning whether they should sell or continue to hold on for dear life (HODL), an online catch-cry for those who see virtual coins as a longer-term investment.
There was disagreement about the cause of the latest dip in cryptocurrency value.
One view is that crypto markets have historically suffered similar dips around this time every year, which a Reddit user attributed to a combination of Chinese New Year and taxation strategies.
“Timing crypto is difficult but the January dip is pretty much the most consistent trend so plan around it next year,” the user said.
John McAfee, meanwhile, attributed the dip to comments reportedly made by JP Morgan on a Bloomberg TV segment.
“I think there’s a big risk from governments banning these currencies eventually,” global market strategist Mike Bell is reported to have said.
McAfee called on investors to “relax” and argued that a government ban on crypto would be difficult.
However, it played into fears raised in the press in the past week over impending crackdowns in South Korea and China.
A further possible explanation for the latest dip is that it’s simply par for the course in crypto.
Virtual currencies are in some ways defined by their volatility, and some market watchers pointed to four instances in 2017 where values suddenly dropped between 30 and 40 percent.
“You can't have those incredible bull runs of late December and early January without these massive corrections,” Whirlpool user Mezo said.
“If you don't like volatility, go play in the stock market.”
The latest dip, however, appeared to confirm a common saying in crypto forums also repeated by JP Morgan’s Bell: “I think it would be very unwise to put any money that you can’t afford to lose into these currencies.”
