Why capital on the cryptocurrency market has fallen drastically and what will happen next?
Welcome. The following information is my private opinion and this is not investment advice.
However, I would like to share my thoughts about the cryptocurrency market with you.
Since the turn of 2017 and 2018, when the BTC course cost $ 20,000, the cryptocurrency market has returned and the bear market dominates. The prices of some cryptocurrencies dropped dramatically since January by over 80%, and the capital at CoinMarketCap.com decreased from January 2018 – 813 MLD from January 2019 - $ 137 MLD, or more than 80%.
Info: https://coinmarketcap.com/currencies/bitcoin/ and https://coinmarketcap.com/charts/
This is proof that cryptocurrencies are less popular. The BTC rate entered the side trend from October to the beginning of November and bounced back from the $ 6,200 support, but in the second half of November there was a breakdown and the price dropped drastically, and with the BTC the altcoin value dropped.
Why the cryptocurrency market is still falling?
In 2017, there was a huge bull market and it was possible to earn money on cryptocurrencies without knowledge and experience. Many business projects based on BTC or altcoin were created, thanks to which more and more new people invested money in cryptocurrencies. Marketing played a major role in attracting new investors, and it kept the belief that BTC would become "digital gold of the 21st century" and that blockchain technology would bring a revolution in the markets and influence the global economy.
Information about the fact that cryptocurrencies are decentralized and beyond the reach of governments and institutions attracted new people who believed that they could make money on cryptocurrency markets and not pay taxes. However, many people did not know that in most countries of the world, after converting cryptocurrencies to FIAT, you must pay the tax in force in your country.
At the turn of 2017 and 2018, there was a breakthrough that could have been caused by the introduction of verification of accounts, among others On the largest stock exchanges Bittrex and Poloniex, which gathered a lot of investors. Belief in the fact that BTC will become "the gold of the 21st century" has been shaken by state institutions, including information about the lack of adequate security, the risk of manipulating the crypto market, and a wealth of information that cryptocurrencies are a speculative bubble that will break.
This could discourage new people from investing in cryptocurrencies and the flow of new capital to this market has come to an end.
Another cause of declines could be panic caused by media noise and lack of price increase. This could have caused many inexperienced investors to massively sell their cryptocurrencies. Panic has started on the markets and massive sale of cryptocurrencies.
Nowadays, it can be noticed that interest in cryptocurrencies among ordinary people decreases because they search less and less for BTC or cryptocurrencies in google trends or adwords.
The investors' hopes could also weaken the shift by Bakkt of the futures contract for BTC. The deadline for the introduction of contracts was moved from December 12, 2018 to January 24, 2019. This could have caused the investors' faith to falter and the price of BTC and altcoins dropped.
The cryptocurrency market is sensitive to good and bad information. Therefore, if the planned event is shifted, investors lose their faith and start to withdraw their capital.
What will the future of cryptocurrencies be like?
I believe that if Bakkt does not introduce futures contracts for BTC, more investors will lose their faith in cryptocurrencies and prices will fall even more. And if this happens, many projects based on cryptocurrencies may fail because they will not have the capital to finance development.
Another reason for the declines may be the mass sale of cryptocurrencies by investors who believe in further declines and want to buy back cheaper.
On the cryptocurrency market there were a lot of people from the street who had no knowledge and experience, which is why the negative news that appeared in the media, stopping price increases and falls could have caused the bear market since the beginning of the year, which in November turned into panic.
The legal regulations of cryptocurrencies in many countries could also cause that many people started withdrawing capital from stock exchanges and discouraged new investors.
Will the cryptocurrency market increase?
Many investors are hoping that the introduction of futures contracts for bittern by Bakkt will affect the price increase and the increase in altcoins. However, if this does not happen then the value of the coinmarketcap may still fall.
It is possible that huge players on the cryptocurrency market are waiting for prices to drop even more and then they will start to buy slowly, which will affect the infiltration.
Is another bubble on possible?
Everything is possible on the cryptocurrency market, but in my opinion, cryptocurrencies are increasingly supervised by state offices and more regulations are being established regulating this market. Many inexperienced investors have already dropped out, and maybe even more will go away and only people with knowledge and experience will be left on the market. And this can make the price fluctuations of cryptocurrencies become more stable. Lack of new people who wanted to quickly get rich and provide new capital to the market will not make prices rise quickly.
The cryptocurrency market had an amazing growth in 2017 because more and more people were learning about what cryptocurrencies are. However, in 2018, almost all of the world knows about cryptocurrencies, there are also many people who have lost money, which pushes them away from investing in cryptocurrencies. The more recent months will show what will happen.
Remember that everything on the cryptocurrency market can happen, and investing involves the risk of losing money. If you liked the post, give me like or comment and give me support.