The cryptocurrency market experienced yet another minor correction earlier today, after an initial decline in value on January 21.
Many major cryptocurrencies in the market with the exception of several digital assets fell by around 10 percent in value, with Ripple recording a 10 percent loss and Bitcoin Cash demonstrating a 8.5 percent drop in price.
Bitcoin and Ethereum fell by just over 6 percent, by a margin smaller than the majority of cryptocurrencies in the global market. Because bitcoin and Ethereum have significantly larger market valuations and daily trading volumes in comparison to other cryptocurrencies, bitcoin and Ethereum tend to decline or increase by smaller margins, showing a lower level of volatility.
Ever since the cryptocurrency market experienced a major correction in early January, the market has struggled to recover back to their previous all-time highs (ATHs). Bitcoin, Bitcoin Cash, and Ripple are all down around 50 percent from their ATHs, while Ethereum has somewhat recovered to $1,000.
Over the past 12 months, the cryptocurrency market has barely had any major long-lasting corrections. Ethereum and Ripple surged by 130-fold and 330-fold each within one year and during that period, most cryptocurrencies in the market also increased by large margins.
For long-term growth, it is positive that the cryptocurrency market has experienced a week-long correction as it would allow the global market to stabilize and solidify, shaking off speculators and weak hands. However, if the daily trading volume of the global cryptocurrency market continues to decrease, in the short-term, the cryptocurrency market could struggle to recover from the recent correction.
Over the past seven days, the daily trading volume of the global cryptocurrency market declined from $35 billion to $27 billion, as South Korean cryptocurrency exchanges Upbit and Bithumb overtook Binance and Bittrex to become the largest exchanges in the market.
Upbit is operated by KakaoTalk operator Kakao’s subsidiary company Dunamu, which is the most widely utilized stocks trading platform in the local market. Because of its connection with Kakao, Upbit users can deposit or withdraw payments using KakaoPay, the most popular fintech application in South Korea. As such, due to the dominance of KakaoPay in the South Korean fintech market and Upbit’s connection to Kakao, the user base of Upbit has increase rapidly.
This week, it was reported that 1 out of 10 bitcoin transactions is being processed in India and more than half of Russians are aware of bitcoin. The adoption of cryptocurrencies like bitcoin and Ethereum is rising rapidly in major economies with unclear regulations and policies. Hence, if the Indian and Russian government regulate their respective cryptocurrency markets in 2018, it is likely that the cryptocurrency market will surge in terms of daily trading volume and value.
Anatoly Aksakov, the chairman of the State Duma’s financial markets committee in Russia, stated that he expects cryptocurrency regulations to be introduced in March. Regulating a massive cryptocurrency market like Russia is an optimistic sign for the mid-term growth of cryptocurrencies.
“I expect that the adoption of the draft law on [cryptocurrencies] will be in March… The problem is that we already have a lot of people who acquire [cryptocurrencies] and they are deceived, we need to give people the opportunity to work legally with it, to protect them as much as possible,” said Aksakov.
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