Since the beginning of 2018, the price of Bitcoin has been one of the most popularly discussed topics within the cryptocurrency ecosystem. The reason for this is not far-fetched as there has been a huge slump in price and a downward pressure that defeats the expectations of many.
Besides the underlying technology and the various ICOs that erupted towards the end of 2017, the steady rise in the price of Bitcoin and other major cryptocurrencies attracted a significant amount of new money. Majority of the new money was from speculative investors who got in primarily for the promise of cashing in at higher prices in the short term. Unfortunately for these class of investors, the slump in price of over 60% from Bitcoin’s all time high means that they have either recouped their investments at a loss, or are “HODLING” in the hope of a rise in price.
No matter the individual perceptions, the obtainable situation is indeed having a significant effect on the ecosystem. While most of the newbies remain confused and wallow in panic as to what may become of the cryptocurrency market, the more experienced players seem unperturbed.
Having acknowledged that 2017 was definitely a breakout year for Bitcoin, and its creation of unprecedented excitement and wealth in the cryptocurrency space, the founder of Netcoins, Michael Vogel notes that the current development is normal with the crypto space. Vogel elaborates that on a percentage basis, the industry has seen similar corrections throughout Bitcoin history. Notably these included periods following November 2013, and even May, June and September of 2017 which all experienced significant corrections. That being said, he points out that Bitcoin is still up close to 800% in the past twelve months so traders don’t need to be that morose!
“For the most part, I don’t think this most recent correction is any different than corrections in previous years. These corrections are in fact how Bitcoin will truly establish itself as a sustainable asset class”, says Vogel.
In all of this, Vogel remains positive that in 2018 we will continue to see many valuable applications built that use Bitcoin as a backbone, and building products of substance will continue Bitcoin on it’s established pathway to success well into the future.
Alexander Lobanov, managing partner and board member of USP Capital Ltd. and VanHealthing Crypto Fund of Biotech Innovations upholds that the price of Bitcoin, as well as prices of other leading cryptocurrencies, remains a major crux. Lobanov notes that even the fate of Ethereum is giving the crypto community quite some concern.
Lobanov tells CCN.com that the negative sentiments expressed by the crypto community and novice traders reveal that the market is indeed already tired from the downtrend. “I share the opinion that after the sharp rise period, an objective consolidation process took place, says Lobanov. “At the same time, the regulatory authorities were very active and added a negative sentiment to the market”.
Contributing to the difficulties faced by cryptocurrencies, many crypto market players started to pay a lot of fiat obligations including tax obligations. These developments resulted in a significant decrease of the new cash inflows with an expectation of quick and high profits. During the last four months, one could make a profit only due to the regular, active and cold-minded trading. During this time, a crypto trader should have kept his finger on the trigger, and all his/her emotions under control.
Lobanov also opines that the market’s “tiredness” as well as the regulators’ attention to the crypto markets influenced in its turn upon the ICOs’ market. Nonetheless, nothing is eternal. Not a constant growth in the increment of 100%, not a period of a decrease and stagnation.
“I am sure that we are at the end of the next cycle of correction and stagnation. The new spring is blooming. Right now one can see non-typical growth of crypto-currencies which has not become a trend yet. I think that it is the beginning of a new growth cycle”, says Lobanov.
As for the ICO market, Lobanov believes that the situation has irreversibly started to change to a more thorough and professional project’s development, especially with respect to their appraisal by the crypto-community as well as by the regulators. He notes that the time of hype ICO collections without any projects’ substance is over and we will see them in a more “reliable” format in the near future.
The innovations in the blockchain area have not been exhausted yet. We have finally received Lighting network. New products and solutions on its basis are also coming up. The big corporations like IBM have started investing into Blockchain. The Ethereum platform has seen significant changes such as a transfer to the Proof-of-Stake, network scaling up and exploring the methods to return stolen or frozen assets. The Waves team intends to introduce enormous changes in the platform’s work such as innovative consensus algorithm, smart contracts’ service, improved Lite-client interface and many more.
Thus, these technological innovations that are springing up are expected to boost a positive impulse to the whole market in the near future.
Featured image from Shutterstock.
Last modified: March 4, 2021 5:06 PM