5 Key Reasons Why Bitcoin and Other Cryptocurrencies Went Under!
It has been another week of wide fluctuations in Bitcoin and other cryptocurrencies' prices, with this one being a downward trend. According to Coinbase, as of right now, Bitcoin has lost 36.20% for this month. Did this loss mark the start of the cryptocurrency bubble bursting? Below is a graph that compares Bitcoin with other bubbles in our history.
And here are 5 reasons why Bitcoin and altcoins went under.
1. South Korea contemplates banning Bitcoin exchanges.
Park Sang Ki, the countries' justice minister, said there were "great concerns" about digital currencies and that his department was preparing a bill that would ban trading in all of them. Officials have also floated the idea of taxes on crypto trading and other measures to tighten its grip on market considered by some as supporting money laundering and dangerous speculative investing. By some measures, South Korea represents about a fifth of the virtual-trade volume.
2. Russian president Putin said regulation is needed in the cryptocurrency market.
This is the prerogative of the Central Bank at present and the Central Bank has sufficient authority so far. However, in broad terms, legislative regulation will be definitely required in future.
3. Bitcoin trading could be banned in China.
Last September China has already banned domestic exchanges and ICOs.
However, according to coinmarketcap.com, BitConnect gained 90.46% in the last 24 hours.
- Bitcoin futures are set to expire this month.
January bitcoin futures US:XBTF8 on Cboe Global Markets Inc. CBOE, +1.06% were set to expire on Wednesday, down 42% over the past 30 days at $10,447, while those trading for the same month BTCF8, +5.07% on the CME Group Inc. CME, +0.50% are due to expire on Jan. 26. Those futures also are down about 42% at $10,455. Expiring futures contracts, in theory, can add to volatility.
What are your thoughts monkeys? Is this the starting of the bubble burst, or a temporary price correction? Do you believe Warren Buffett is correct in saying that Bitcoin and other cryptocurrencies will for certain come to a bad ending? Which cryptocurrencies are you invested in or are you bullish on?
Glad you shared this. I hope this sight starts to offer more credible commentary in regard to cryptos, but I'd be happy to offer some of my thoughts on the subject matter. It is my hope that this thread will explode.
Please keep in mind that I am by no means an expert and am just sharing my personal beliefs on the subject.
To begin with, what we saw was by no means a correction. This was a mere temporary price reduction led by FUD. Traders are concerned that the implications of SK's ability to trade will drastically undermine the value of the various coins. This is understandable, as they make up 35-40% of the coin holders on a global scale. However, there are certain reasons as to why this should not scare knowledgable investors. If you look into decentralized exchanges (i.e. Airswap, EthDelta, 0x - my favorite), you will learn that citizens in countries which have banned crpto trading, will still be able to actively participate as long as they can access to the code. Yes, many investors in SK may be detered, but my argument is that many of the larger plays and market movers will circumvent these bans. If SK actually does ban trading, we will likely lose market cap in most exchanges, and it will be a good time to buy for those willing to hold on for a longer duration (2-8 months).
Another major trend is a shift in dependence from Bitcoin's pricing in regard to other major cryptos. Yes, the crash affected virtually all of the top 10 cryptos in the same manner, but this does not mean they all move according to what happens with Bitcoin. 2018 will be the year that I believe we see Bitcoin continue to fall in coin price, while Ethereum and other cryptos gain traction. Ethereum no longer seems to move as heavily when Bitcoin related news arises. With everything that is building off of Ethereum, I see no reason as to why the market will not eventually correct its coin price to a point where it exceeds that of Bitcoin. Understanding that Bitcoin will always be the initial pioneer is important, and it may always have inherent value due to it being initially used as an exchange by so many entities (governmental, businesses, etc.).
I mentioned this earlier, but the futures have already began to expire on Bitcoin through the CME. After the major crash during Dec, we learned something new about crptos. Their value will likely not be going to zero any time soon, as they withstood all of the investors that applied shorts to the cryptocurrency. Bitconnect has no doubt helped to spur the price reduction, but in the past 24 hours we have seen things recover, and move back in the correct direction. I do not have any data to back this, but it is my personal belief that Russia's stance on crypto trading will not manipulate the price too drastically. I do not believe that more than 10% of the BTC, ETH, XRP, is currently held by Russians.
In terms of investment in other cryptos, I have personally bought into Iota, WTC, and have been a long term holder of ETH. I am looking at 0x now, and would advise others who are interested to read https://www.wallstreetoasis.com/forums/im-in-college-and-a-millionaire-…</a">this thread started by Smart Thinker. He seems to understand the actual tech better than most, and has made some very accurate speculations in recent months.