Crypto currencies went into a dive this week, with losses as high as 50 per cent as markets lost confidence in the sector.

In Australia, the sweeping change in sentiment hit the first cryptocurrency ETFs to trade on Australian exchanges, with their opening behind described as “underwhelming”.

On the Cboe Australia exchange – previously Chi-X – of the three listed, it was ETF Securities’ 21Shares Bitcoin product which managed the highest volume, some $955,000.

The 21Shares Ethereum ETF managed $604,000 in traded volume, while bitcoin fund Cosmos Purpose Bitcoin Access ETF made $454,000.

The timing couldn’t have been worse.

The  Economist carried a lead story claiming “Crypto cracks” and reported: “More than half the market capitalisation of cryptocurrencies has been wiped out since November.

“On May 12th bitcoin traded at around $29,000, just 40% of its all-time high in November; ether has slumped by a similar amount.

“The share price of the leading crypto-industry stock, Coinbase, an exchange, is half what it was a week ago, falling 26% in a single day after it reported earnings and disclosed that users’ deposits on its platform were not necessarily protected in the event that the firm went bust.”

The value of bitcoin has plunged in the last seven days and was worth $US28,000 ($40,700) yesterday.

“We are closely monitoring the demand of cryptocurrency ETFs and proactively speaking to our customers about the opportunity these instruments present, however, at this early stage we have decided not offer these on the nabtrade platform,” Adrian Hanley of nabtrade told The Australian.

Elsewhere, even
Yahoo reported US regulators, already skeptical of crypto, are doubling down on their stance as the digital asset markets plunge this week.

US Securities and Exchange Commission chair Gary Gensler said in an interview with Bloomberg on Tuesday, calling out crypto exchanges for offering multiple services that are often in conflict with one another, such as custody, market-making, and trading.

“Crypto’s got a lot of those challenges – of platforms trading ahead of their customers. In fact, they’re trading against their customers often because they’re market-marking against their customers,” Gensler said.

The Econonomist conlcuded: “The dynamics of recent days bear the hallmarks of spectacular financial collapses of old.”

The advice to those involved in the trades:  hold on tight, it’s a rocky ride but you’ve probably made the worst losses.

And to those thinking of entering the market, the consensus is: “Don’t.

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