The cryptocurrency market keeps sliding, but a recovery could be coming
It's been a bad month in crypto-city.
Bitcoin, the largest cryptocurrency by market cap, is trading at $7,076 -- a 7% decrease in the last 24 hours and a 34.6% decrease on a monthly basis. The second largest coin, Ethereum, is being absolutely pummeled, having dropped 5% to $398 in the last 24 hours, and losing more than half of its value (55.1%) since March 1. And none of the other major cryptocurrencies fared much better.
SEE ALSO:This space heater mines cryptocurrency while keeping your house warmA part of this price drop can be explained by an onslaught of bad news, mostly having to do with increased regulatory scrutiny of ICOs (initial coin offerings) and cryptocurrency trading in most of the world's markets. The fact that Facebook, Google and Twitter all banned cryptocurrency-related ads on their platforms didn't help. Other recent news, including a rumor of a new mining chip being built for Ethereum (which could make it more centralized) as well as an important, bearish technical indicator called the "death cross" happening on Bitcoin's charts, have certainly contributed.
The news don't matter
It's hard to shake the feeling, however, that the prices have recently been going down regardless of the news cycle.
Edward Cooper, Head of Mobile at Revolut, seems to think so. "I don’t think the recent market movements in the crypto space are particularly related to any current news story. The price swings in crypto that are caused by news stories are generally much more extreme than we are seeing now," he told Mashablevia e-mail. "It’s a natural cooling off period following an unprecendented bull run towards the latter part of 2017."
There's certainly been a fair amount of good news in the crypto space as well, but none of it did much to change the bearish trend. Just recently, Morgan Stanley analysts said Bitcoin could be looking at a "strong recovery." Money is still pouring into blockchain-related startups. And there's exciting news on the development front for both Bitcoin -- check this handy list -- and Ethereum, whose co-founder Vitalik Buterin recently proposed a novel new way of scaling Ethereum called Plasma Cash.
"ICOs and cryptocurrencies have faced lot more serious problems in the past and have emerged stronger. This time is not going to be any different."
But if positive news aren't enough, what will it take for the crypto prices to get a steadier footing? Most experts think it's just a matter of time. "This same cycle of hype and then a return to normality happened in 2011, 2013, and 2017, and will doubtless happen again," said Cooper . "ICOs and cryptocurrencies have faced lot more serious problems in the past and have emerged stronger. This time is not going to be any different."
What goes up, most go down...and then up again?Credit: coinmarketcap.comICO cooldown
Ethereum's incredible boom in 2017 was largely due to a huge interest in crowdfunding efforts (ICOs) on its platform, but the enthusiasm is waning. Just months ago, it was nearly trivial for a decent ICO to raise tens of millions; now, investors are taking a second look at what they're getting into. The data does not support it yet -- CoinDesk's ICO tracker only shows a modest drop in ICO funding in January, and the data for February isn't available yet -- but after three consecutive months in which funding reached an average $1.5 billion, it's probably time for a cooldown. Another factor are startups which raised large quantities of Ethereum, such as EOS, that now may be selling it for fiat.
Tweet may have been deleted
There's hope for recovery on the horizon, though; perhaps Telegram's and Rakuten's monster ICOs, planned for sometime this year, will revive the ICO scene.
Charles Hayter, CEO of CryptoCompare agrees that this is a "fear and panic"-driven correction after "irrational exhuberance" on the market. "There is certainly selling pressure from funded ICOs and more caution in what gets funded as returns are falling," he told me via e-mail.
He also remains bullish long-term, especially now that as institutional investors are joining the crypto fray.
"There are still the money flows from traditional finance which should bring more buying pressure when opened up – family offices and hedge funds have been dipping their toes but mainstream products for the larger cash holdings that meet their remits will create another bull run," he said
The principal problem with assessing the price of cryptocurrencies such as Bitcoin and Ethereum has remained: These assets do not generate revenue, and are therefore subject to speculation regarding price, which often goes to extremes. Will Bitcoin one day become a global, cheap, widely-supported currency and payment platform? Will Ethereum fulfill the vision of becoming a global computer? It's possible, but speculation is still way ahead of technology. Investors who are still holding on to their coins might get some comfort from optimistic experts and the fact that crypto has always bounced back after big bearish periods but, as always, there are no guarantees.
Disclosure: The author of this article owns, or has recently owned, a number of cryptocurrencies, including BTC and ETH.
Featured Video For You
'Uber' co-founder Garrett Camp is creating a new cryptocurrency
-
Tesla considers adding a new ‘stuck detection' feature to Cybertruck. Here’s why.Elon Musk: My dog is running Twitter now他用行动践行“服务群众”Quincy Jones to launch his own video streaming site dedicated to jazzThe Weird, Wonderful World of Water TowersWhatsApp lets you save disappearing messages (with a catch)More Korean women live alone, think less about marriagePoll suggests alternative military service 1.5 to 2 times longer than regular oneCoach jailed for sexual exploitation of underage athlete书画重阳 八旬老人集体过寿辰
下一篇:21 Unexpected Wonders in Colorado’s Vibrant Cities and Small Towns
- ·Apple to start manufacturing iPhone Pro in India, report claims
- ·Selma Blair removed from plane following 'outburst'
- ·雅乐高速16日零时起开始收费
- ·雅电集团喜获全国“安康杯”竞赛优胜单位称号
- ·提前谋划部署准备秋季开学
- ·'Bohemian Rhapsody' finds new director after Singer's firing
- ·Bluesky Social invite code: How to get yours
- ·Poll suggests alternative military service 1.5 to 2 times longer than regular one
- ·From Prairie Grasslands to Man
- ·Bitcoin price surges to almost $17,000 as trading begins on ‘futures’ exchange
- ·This Twitter bug will give you back your blue check... sort of
- ·N. Korean leader congratulates Putin on reelection
- ·11 Unique Amaros and Liqueurs to Level Up Your Aperol Spritz
- ·兑现奖励政策 全力支持灾后重建
- ·Seoul to dismantle support foundation for Gaesong complex as early as next week
- ·N. Korean delegation departs for Mongolia
- ·Elon Musk's AI facility is reportedly operating gas turbines without a permit
- ·Festive dogs everywhere are saying hi to Santa Claus
- ·破解农村干部成长“天花板”
- ·6 ways safety could have been improved in that epic 'Game of Thrones' battle
- ·两个改造提升项目进入收尾阶段
- ·江门双桥村:经营权入股共建联合体,以“旅民共生”富民兴村
- ·Thermal power cell harvests electricity from heat at record efficiency
- ·Selena Gomez fell at her concert last night, three days after Justin did the same
- ·“笋货”上市采购旺!清远西牛麻竹笋迎秋季尝鲜热
- ·Some people are not happy about Nigel Farage's victory speech
- ·Expanded police surveillance will get us “broken windows” on steroids.
- ·趣味重阳 多彩活动乐夕阳
- ·'Bohemian Rhapsody' finds new director after Singer's firing
- ·WhatsApp on multiple phones: How to link your devices
- ·CPUs Don't Matter For 4K Gaming... Wrong!
- ·More Korean women live alone, think less about marriage
- ·Festive dogs everywhere are saying hi to Santa Claus
- ·NK leader guides military drills of paratroopers, calls for war preparations
- ·Best smartphone deal: Google Pixel 8a on sale for $449 at Amazon
- ·Beware of shady knockoff ChatGPT apps