In the middle of the week, many of the top digital currencies in the world saw their values plunge dramatically. All told, about $6 billion worth of crypto value was wiped out in the span of a single day. Among the most popular digital currencies, ethereum and ripple (XRP) led the dive, according to data by Coinmarketcap. Even in spite of having recovered slightly from midweek lows, ethereum was hovering just marginally above $200 and XRP was below $0.42 per token as of this writing. This marks declines of 10% or more from last week at the same time for both of these tokens. Bitcoin also fell in the turbulent period in the middle of the week, although it stabilized before losing an equivalent percentage of its value. Nonetheless, with a price of $6,274 as of this writing, BTC has fallen below the mid-$6,000s price point it has experienced for several weeks.

Reasons Behind the Sell-Off

The big question following the week's major cryptocurrency dip is why such a collapse took place. It may be linked to the massive stock market declines which began later in the week. Still, a drop in cryptocurrency prices aligning with a fall in the stock market is somewhat unusual. In the past, digital tokens have often been perceived as "safe haven" investment options in the case of stock market declines. More recently, though, BTC and other cryptocurrencies have tended to see their prices rise and fall in greater alignment with the movements of the broader stock market.

Vanity Fair's New Establishment List

Earlier this week, Vanity Fair released its annual New Establishment List, a collection of 100 figures from the "influential and intersecting worlds of technology, media, entertainment, politics, and beyond, which are shifting and shaping the global conversation." The 2018 list featured two prominent figures in the digital currency world: Coinbase CEO Brian Armstrong (ranked 34th) and Ethereum co-founder Vitalik Buterin (ranked 43rd). Supporters of cryptocurrencies may be inclined to see the inclusion of these two figures in the list as a sign that digital currencies are becoming more broadly accepted in mainstream culture.

Yale Endowment

News from Yale University indicates that the Ivy League institution, which has the second-largest endowment of any American university, has invested heavily in a digital currency hedge fund launched by Coinbase co-founder Fred Ehrsam. The hedge fund, called Paradigm, is reportedly raising $400 million to invest in blockchain startups, digital currency exchanges and other related ventures.

Investing in cryptocurrencies and Initial Coin Offerings ("ICOs") is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns bitcoin and ripple.

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