After a recent closed-door PBOC meeting relating to AML regulation in Cryptourrency trading, and the suspension of withdrawals from two China’s biggest Bitcoin exchanges the BTC market crashed over 10% in response. However, the recent actions didn’t only affect Bitcoin’s price. In fact, over 90% of cryptocurrencies experienced some sort of price drop.
They say a picture is worth a thousand words, take a look at this chart from coinmarketrcap:
As you can see every single one of the top 12 coins has seen a significant drop in value. Traders attributed this scenario to the fact that most altcoins trade on a Bitcoin pair. As a result, since coinmarketcap shows the value of altcoins based on fiat, it is bound to experience some form of loss. Once again, Bitcoin proves itself as the market leader in cryptocurrencies.
Will PBOC Actions Affect Altcoin Exchanges?
The next question that comes to mind is how will the PBOC regulation affect the Altcoin markets. According to this altcoin exchange comparison chart, the biggest altcoin exchages are located in the US. Since PBOC only affects Chinese exchanges it is unlikely that we will see any changes in US based exchanges.
It is surprising to see the other cryptocurrencies react in such sync with Bitcoin’s price drop, but that is only to be expected if the main trading pair is in BTC. It may be a good idea for altcoins to try and switch to a fiat based trading pair in order to avoid scenarios like this in the future.
Furthermore, the chart tells the same story as those coins with a heavy presence of fiat based trading pairs such as Litecoin and Ethereum, didn’t experience as significant of a price drop as those that mostly rely on the coin’s value in Bitcoin.
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