Today, ZCash price has risen above the $200 mark. At the sime time, Etherum and Bitcoin dropped about 8.5% and 7%, respectively. This is all in the light of China Bitcoin ban news. However, the situation is highly mysterious, as some sources claim that the ban is not going to take place.
Reasons For the Bitcoin Price Drop
Regardless, there might be a couple of factors for the cryptocurrency price drops. One of them is the rising mining difficulty of both of the coins. Especially with Ethereum, some could see the cryptocurrency as unstable, as something that could “freeze” and never thaw again.
For Bitcoin, the reason could be the recent announcments on JPMorgan Chase employees showing cryptocurrency in a bad light. Marko Kolanovic, the head of quantitative and derivatives of the company, expressed criticism of Bitcoin in a client note:
Cryptocurrencies cannot be reliably valued and they have significant ‘tail risk’ that could come in the form of a regulatory ban. Moreover, the whole cryptocurrency market exhibits some parallels to fraudulent pyramid schemes.
Bitcoin Price Down, ZCash Price Up
Amidst crypto price drops, ZCash could be seen as an island of stability, being different to other coins. Seen as a reliable store of value and a good investment, people invest in ZCash instead of other cryptocurrencies. Another reason for the price could be a good old pump-and-dump strategy being played out on the coins. ZCash, in this situation, could be in the accumulation phase of the underhanded business method, while Bitcoin and Ethereum could be in the dumping phase. Basically, how this works is that someone with a ton (and I really mean it when I say a ton) of money accumulates a stock or a cryptocurrency in this case, then buys as much of the asset as possible in order to get the price up, then instantly sells for a huge profit. Granted, this is illegal, but in the anonymous, private crypto world, we’re unfortunately very suspectible to this kind of market price manipulation.