The E-Coin cryptocurrency went through a significant change in its value within a 24-hour time period on February 6. The currency went up by nearly 4,000 percent in value but ended the day falling more than 80 percent off of its original value. This is a dramatically different point from the other major cryptocurrencies on the market.
The E-Coin had been trading at around $5 recently although there had been a few times where it reached $15 in the past month. But on February 6, the currency experienced a dramatic rise in its value.
The currency started out the day at $13. The value burst in a two-hour period and eventually reached $290 during the middle part of the day. It was soon subjected to a massive selloff where the value fell to $60.Advertisement
The currency went back up to around $200 during the late part of the afternoon. Its market cap had reached $1 billion for a period of time. After that, the E-Coin quickly dropped to only a few dollars in value. It was traded at $2 at the end of the day and now has a market cap under $10 million.
The sudden increase in value had been in contrast with the losses that other cryptocurrencies had experienced. But at the end of the day, the E-Coin fell apart while other currencies are starting to rise back up in value. This includes some major currencies going up by 10 percent or more in value over the day as the market rebounds.
What Caused the Rise?
It is unclear as to what the E-Coin experienced such a massive rise in value and eventually fell quickly. Analysts have been suggesting that one or two very large orders might have been placed for acquiring the E-Coin. This could have possibly caused the market value of the coin to go up by thousands of percentage points in value.
It took approximately seven hours for the currency to rise and then fall back in value. This is a radically different trend for the currency as it had been stable in value for a decent period of time.
Background of the Coin
The E-Coin is operated by the Quid Pro Quo Association, a group based out of Zurich. The coin had been trading around the same value for close to a year with the value getting up to $20 in some cases.
This past September, the group was shut down by the Swiss Financial Market Supervisory Authority. This comes as Quid Pro Quo did not have the proper banking license for handling the currency.
There were also concerns that the E-Coin was fake. The group had produced the currency alongside the Digital Trading AG and Marcelo Group AG organizations.
The cryptocurrency has also been a point of concern for how it is stored on local servers and is not backed by any particular assets. As a result, it could become easily diluted. The potential for the currency to increase in value in little time had always been there with the new rise in value on Tuesday being a dramatic example of this.