Investor Jitters and 4Chan Hoax Knock $4 Billion Off the Value of Ethereum Cryptocurrency – Gizmodo

Following a flash crash last Wednesday, the company that runs GDAX, an exchange for the ethereum digital currency, announced that it would pay back investors who lost money. If Mondays market performance for the cryptocurrency is any indication, that move didnt reassure investors.

Cryptocurrencies are risky as hell. A new competitor in the blockchain currency world, Ethereum,

The most reasonable explanation for why the Ethereum currency dropped from a high of $311.46 on Monday to a low of $238.65 is that a market correction is taking place for the out of control values of digital currencies. Analysts reasoned that investors who have seen their bets pay off decided today was a good time to take their money and run. Across the board, the most popular cryptocoins showed huge declines.

Ethereum, the second most popular coin offering around was particularly vulnerable today. It didnt experience the highest losses but it came close, shedding 19.79 percent of its value. The aforementioned flash crash and its recent notoriety mean that a lot of eyes were watching as its counter steadily ticked down. But some observers have placed part of the blame for Ethereums fall on the shameless tricksters on 4Chans /biz/ board.

On Sunday, an anonymous post appeared on 4Chan claiming:

Vitalik Buterin confirmed dead. Insiders unloading ETH. Fatal car crash. And now we have our answer. He was the glue. It will be difficult for ETH to recover and the entire crypto sphere is in big trouble.

Vitalik Buterin is the young inventor of the ethereum blockchain. Unlike the creator of bitcoin, hes not masking his identity. Hes also not dead. He also doesnt control ethereums decentralized network. But hes the face of his own creation and nervous investors may have seen the rumor as a good time to sell. Buterin quickly took to Twitter to issue proof of life through data from the most recent block in the chain.

According to Quartzs calculations, Sundays escapades knocked $4 billion off the digital currencys market value. At the time of posting, ethereum is worth $257.55 which is still way higher than the $8.37 it started at in January.

Thats nothing compared to bitcoin which is currently valued at $2376.29. The digital currency that started it all experienced an 8.81 percent decline today. Investor and crypto hedge fund manager Tim Enneking tells CoinDesk that this is the primary reason for todays market activity. When bitcoin sees a large move down, as weve seen in the past 48 hours, it still has a tendency to take the entire rest of the market with it, he says.

What goes up must come down. But Union Square Ventures partner Fred Wilson is feeling good about the long-term. My gut says we are headed for a selloff in the crypto sector, he wrote in a blog post on Monday. He says hes still convinced itll be a good bet over the next five or ten years. He also wrote, I am wrong a lot.

[CNBC, Quartz, CoinDesk]

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Investor Jitters and 4Chan Hoax Knock $4 Billion Off the Value of Ethereum Cryptocurrency - Gizmodo