Is this the end for crypto?
Its panic, panic, panic everywhere.
This week was brutal for cryptocurrency holders.
We have seen the market lose nearly 24% of its value in the space of a week, going from 212 billion to 162 billion (as of today November 19th 2018), and there is no sign of it stopping anytime soon. Market value is currently at its lowest since October 12 2017, and experts are struggling to find the factors that may have caused such a drop.
It is no secret that 2018 has been one of the worst the performing year for cryptocurrencies since the last bear market in late 2013 which lasted almost 2 years. The crash of April 2013 came after bitcoin’s first big brush with the mainstream. The currency had never crossed $30 before 2013 but a flood of media coverage helped drive it well above $200. The crash, which followed two smaller jolts in March, reflected in part a correction to speculator exuberance. However, it seems that history repeats itself and after the mainstream exposure to crypto in late 2017, we might be in for a longer bear than expected.
Let’s also remember that the market has been relatively stable since Q3 of this year, with bitcoin fluctuating in the $6500 range. Therefore, many wonder what could have caused this sudden drop in market capitalization?
There is a lot of speculations surrounding the causes that may have sparked this turmoil. Several have attributed this recent downtrend to the recent hard fork proposal. Over the last few days, there was a polemics around a “hard fork” on the bitcoin cash network that consisted in creating a new cryptocurrency from the Bitcoin cash blockchain. This proposal created a situation of instability and panic among several investors, who hastened to sell their assets.
Other speculations theorize on the fact that nobody “controls” the market, as in ” it is not regulated”. It is then possible for highly influential individuals to artificially raise or lower the cryptocurrency market. This is only speculation. Several people support this hypothesis by mentioning that the “whales”, who are people who hold a large part of the market’s holdings, would be in the process of lowering prices in order to continue their accumulation and gain control in the market. This hypothesis, however, can not be verified.
Again, Is this the end for crypto?
Once again, no.
Everything that has been happening the last couple of months would suggest that this is only the beginning. Despite interest being lower than 2017, crypto has never been more mainstream than before. Major players, such as large financial institutions have been keeping an eye on the crypto market for a while, and many have already taken steps toward integrating cryptocurrencies into their daily operations. Not to mention, there will be an official launch of Bakkt on December 12 2018, which has been the most awaited moment in the year for crypto enthusiasts.
“ICE will list Bakkt Bitcoin (USD) Daily Futures Contracts for trading on Dec. 12, 2018. The product will be physically-settled and cleared by ICE Clear U.S., Inc. ” – Ana Alexandre, Cointelegraph
No one can truly predict the effect of their launch on the market at this critical time, however, it will be an important one.
All there is left to do is to be patient. Only time will tell. The bravest investors see this as an opportunity to buy even more crypto-currencies. Many predict that we will never again see such low prices, and those who miss this opportunity will not be able to reap the benefits when the market regains its strength.