The year 2018 is seeing a lot of downside volatility in the cryptocurrency market. The total market capitalization weighed in at $385 billion (at the time of writing) which is more than -50% from the January high of $830 billion. For the last three weeks, the charts have registered more than the first forty coins in red ink. This means that investors are jumping ships and preferring Fiat instead of altcoins.
What’s Causing This Volitality?
Asian Countries Trying to Put a Leash on Crypto
The reason causing the crypto downfall is not one but many. Countries across the world are trying to introduce rules and regulations to centralize this decentralize market. There were misleading news reports published in media saying that a ban of crypto was certain in South Korea. The news led to a mayhem and South Korean Finance Minister had to conduct a press conference to clear the air. Almost same -scenario happened when recently Indian Finance Minister made a speech during Budget 2018-19.
During his speech, the Finance Minister said:
“The government does not recognize cryptocurrency as legal tender or coin and will take all measures to eliminate the use of these crypto-assets in financing illegitimate activities or as part of the payments system.”
Again, the mainstream media controversially claimed that a crypto-ban is impending leading to another fall in the overall market cap. As per the Finance Minister, the country is just putting a leash on the use of crypto in illegitimate activities or as part of payments system.
Bitfinex – Tether Hazy Relationship
Earlier this week, Commodities and Futures Trading Commission (CFTC) issued a subpoena to Bitfinex, one of the largest crypto exchanges in the world. The regulators believe Bitfinex has underlying interest with virtual currency Tether. The foggy relationship was nosed out last year itself, however media smelled the subpoena little late. The speculation says the exchange is creating Tether coins out of thin air and using them to buy Bitcoins to increase its value.
Facebook Bans Cryptocurrency and ICO Advertisements
Recently the social media giant revised its advertising policies. Facebook is concerned with its platform being mis-used by ICO and cryptocurrency FUDs. The company wants the platform should be safe and the overall community experience should not deter. The ban is not permanent, the policies will change when a better structure is devised to detect deceptive and misleading advertisements.
What’s the Current Status?
With the beginning of the February, the price of Bitcoin has plummeted and has seen a value beneath the $8000 mark for the first time since November. Investors who bought the currency seeing the meteoroid hike of the crypto (in December Bitcoin price was $20,000+) are seeing their asset lose over half of its value.
The price of Ether has gone under $900 mark and registering a loss of 13.77% over the last 7 days. Ripple registered a loss of over 14.86% and the current value is at $0.79. Not just the top 15, overall crypto-market is painted red all over with just a few exceptions.
What’s the Future?
The crypto-market believers expect the market to recover soon. And probably they are correct in expecting so. If one looks at the value of cryptocurrency coins last year, Bitcoin was just at $982. A year later, Bitcoin value has seen a hike of almost 900%. If you look at Ether, the ICO market rise has led this cryptocurrency reach a value of value of $1200 whereas in January 2017 it was $10.
Moreover, the true potential of Blockchain, the technology behind Bitcoin is not explored yet. It is revolutionary, with many positive benefits for society and the business world.