Broad cryptocurrency market trends and should investors be concerned.
Some of you might already know, but in the interest of full disclosure I’ve been a cryptocurrency investor and Bitcoin/Ethereum holder since sometime in early 2017. Throughout that time I’ve seen Bitcoin achieve great things consistently outperforming people’s expectations and crushing the naysayers doomaday predictions. I have followed Bitcoin the way to it’s all time high of just a hair over USD $20,000 a coin and have watched the total crypto market cap exceed USD $835 billion.
When I was first buying into Bitcoin at around USD $2,000 a coin people said I was crazy and that there was no way that the price could go any higher! From the moment I learned about Bitcoin and the blockchain though I was a believer, both in the project and the concept that the decentralization of the global money markets was one day going to become a reality and change the world for the better.
Since the day that I bought my first Bitcoin I have bought and sold various crypto assets more times that I can remember and it’s always been the same case. People have always been telling me it’s a bubble, that at some point it was going to collapse and all of my hard earned money was going to be gone. Sure there are always going to be scams, but most half intelegent investers can spot them a mile away!
Don’t get me wrong I’m not magical or immuned to the fluctuations that occur in currency markets be they fiat or cryptocurrency. With Bitcoin currently sitting at around USD $8,750 my portfolio is in the red just like everyone else’s . Well at least that is if you look at it from a short-term point of view.
This is what I keep telling the brand new investors. The poor people that got caught up in the hype train, the marketing and the media frenzy that was occurring only 2 months ago. For the investors that bought in only a couple of weeks back at the all time highs this is an awfully bitter pill to swallow. As it stands now, the market, at least for some currencies is down over 50%. I have some very close friends who bought into crypto at the peak and the anxiety that comes from constantly looking at their exchange apps is terrible. I keep telling them they just need to relax and that the market will return. It’s just a matter of time… and it could be a damn long time but panicking and pulling their money out now could possibly be one of the worst decisions you could make.
I like a lot of cryptocurrency investors and commentators out there, I think of the current crypto market correction as being a healthy one. It’s basically just growing pains, like the market is shaking off some of the bad money that been poured into it. Everyone needs to realize that compared to the big fiat stalwarts like the USD, EUR and CHF, Bitcoin is still a very new currency. Nothing becomes a global standard without going through some of these trials and tribulations.
Another potential factor that has potentially impacted the crypto market and that has certianly gained a lot if media interest is the involvement of South Korean trade (and the regulation thereof) in cryptocurrency. Not many people realize but from an adoption point of view the people of South Korea have flocked to cryptocurrency shown an appetite for trading well beyond that of investors in most other countries.
Essentially, well at least might take on things, is that the South Korean government has seen the incredibly rapid uptake of crypto assets by it’s people and was terrified that a collapse of the “crypto bubble” could cause huge panic on South Korean money markets and could potentially collapse their economy. What the government didn’t consider was that by rapidly changing the regulation around cryptocurrency investment they could potentially create a panic for investors and collapse the cryptocurrency markets. In the end, what the South Korean government caused was not a total collapse of the market but a still significant 1.6% drop in the Bitcoin price and a almost 1% drop in the price of Ethereum.
More information on South Korea’s measures to curb the speculation in cryptocurrency trading you can have it read of the white papers here.
Another significant impacting factor on the current cryptocurrency market cap is a raft of crime and theft of large quantities of cryptocurrency. There’s a lot of concern from investors around the safety and security of many of the large online exchanges. This was highlighted once again when the Japanese authorities ordered the tokyo-based exchange Coincheck to completely reassess it’s security systems and come up with proven measures in order to safeguard their investors after almost $530 million worth of NEK coin was stolen from them.
Last but not least I’d like to give people a little bit of perspective on exactly why a good portion if not the majority of investors were involved in the crypto markets to start off. It is no surprise to a lot of the long termers (and I’m not even putting myself in that boat) that most Bitcoin, Litecoin, Ethereum and other crypto asset traders saw the insane gains of the last 2 months and ran to exchanges to jump in and make a quick buck. This is never a smart way to invest! I know it sounds harsh, but to a small extent I’m kind of happy that these people have been burnt. It’s a lesson to them as to the seriousness of investing. If bitcoin, or any other cryptocurrency is to become a true global transactional power this speculation and rapid in and out trading has to stop.
For now and for me, I’m excited for the future of crypto. I’m hanging in there and hodling my coins. I’m still ahead on the the coins that I first bought when I started trading and I’ll be looking to buy more. If bitcoin gets as low as some people are saying it will (in the USD $6,000 range) it should present an amazing buying opportunity. So for now I sit tight and wait 🙂
Thanks for reading!