Cryptocurrencies have been crashing: Here are some explanations

The price chart resembles the battlefields, the red arrow is continuously raining. Since the beginning of the year, Bitcoin has fallen by more than 50%, which is cutting more than $ 100 billion by market capitalization. At the time of writing, Satoshi's Digital Gold trades at about $ 6,400 per coin, which some analysts have estimated at the beginning of the year that there is a lot to cry from $ 100,000.

And this is not just bitcoin.

For example, after the highest time recording time of more than $ 1,400 in January 2018, ether has fallen equally. Last month alone, Ether has shed nearly $ 11 billion in market cap (this is equivalent to 55,000 Lamborghini Huracan). Rpal's XRP, which comes close to $ 4 per unit once, has also become a victim of gravity, which has crashed 90% by the top of January.

All things are considered, it is a bloodletting.

It is difficult to pinpoint a reason for the fall, and some coins are already booming in the beginning of this week. Here are some factors that market observers believe can contribute to the crypto massacre.

Liquidity to ICO fund
Some have found that blockchane and cryptocurrency projects can convert their ether reserves into Fiat currencies to meet financial obligations. At the expense of the face, it seems, because startups have many expenditures during their development phase. If a collection of companies ended the cryptocritic - mostly ether- that they were raised in the ICO at the same time, they could put less pressure on prices.

Considering that some startup raised hundreds of millions of dollars of crypto, a single company might be responsible for dip-although none of these depths or periods may be. However, it would be easy to blame the big, fair cast, many of these teams are fully aware of their external impact on the markets and they have specially designed conversion strategies to limit their impact on prices. Rather than flooding the exchanges with sales orders, they plan for small liquidations spread over several weeks, but not for months.

ICO liquidation theory also fails to answer a basic question: why now? We are several months before the tax season and some of the largest ICOs (like Tezos) are changing their properties for some time.

Negative feedback loop
It is possible that the decline in price reflects a combination of negative feedback loop, economics and psychology. Since crypto investors sell their holdings, they see prices are falling. It can get trapped in selling them even more. This is somewhat like running a bank, except that investors lose faith in the value of cryptocurants rather than the viability of the financial institution.

In October last year, Timothy Lee in Arms Technica suggested that positive feedback might be a loop, which boosts the Cryptocurrency bubble in the first place. Now we are looking at the opposite force in action.

general malaise
Cryptocurrency Investors (and especially Etherium backers) can be frustrated by idx, banker and cryptokyzzy by reduced use of decentralized applications (DAP). These apps run on crypto tokens, and thus generate demand for properties.

But when the investors go to the Cryptocurrency Exchange, they are not given information about the daily active users on various DAPs. They are usually presented only with a property price and a chart of its history. Crypto trade usually does not include cash cash flow analysis or does not accept anything beyond the token's price. After all, these digital assets are worth anybody who is willing to pay for them, even if they are used beyond speculation. These days, buyers are not willing to pay the same for cryptrocross because they were not long ago.