Tokyo-based asset manager Shinhan Dachi Daiwa (SDD) said the recent correction in the crypto market suggests that some digital currencies are “likely to fail with their value falling to zero as they don't have intrinsic value."
One SDD research analyst even went as far as to say that it is unlikely any cryptocurrency will “survive in the long run."
"With reports on a renewed crackdown on the cryptocurrency in China fuelling anxiety over future restrictions, further losses could be on the cards (for bitcoin) in the near term. The sharp depreciation witnessed in bitcoin today should remind investors on how explosively volatile and unpredictable the cryptocurrency can be,"the analyst explained.
SDD noted the latest sell-off in the crypto market has led to several major digital currencies shedding more than 60% of their value over the past six weeks. The decline, which is now in its second month, has resulted in billions of paper value losses.
The leader of the crypto pack, Bitcoin, has plunged nearly 70% from its peak of almost $20,000 on December 16. Ethereum, the second largest cryptocurrency in terms of market value, fell nearly 30% between Tuesday and Wednesday. The other two major currencies, Litecoin and Ripple, have also suffered massive drops, SDD said in its statement.
Market starts recovery
By 9am UTC on Friday, Bitcoin was trading at $8,012.87, hovering above the $8,000 panic level, data from CoinMarketCap showed. Ethereum, Ripple XRP, Bitcoin Cash, Cardano, and other cryptocurrencies also sustained their uptick.
Cryptos re-entered the bull market on Wednesday after Bitcoin bounced back from a low of $6,000 followed by the rest of the big market names.
Various reason pushed the cryptocurrency space into bear territory. A major one is the regulatory shakedown in China and South Korea, with a strong blow also dealt by the growing number of hacking incidents involving cryptocurrency exchanges, fraudulent activities, and reports of market manipulations.
However, several industry players believe that the storm has subsided, and better days await the crypto market.