All the newbies in cryptocurrency world have begun to panic at the declining prices of cryptocurrencies.
The leading digital currency, Bitcoin, stumbled quickly after reaching an all-time high of $19,850 on 17th December to below $12,000 within a few days, as stated by CoinDesk’s Bitcoin Price Index. The question of every newbie cryptocurrency investor is, Why are the prices of digital currencies falling?
In case you don’t know, cryptocurrency is a new type of revolutionary digital currency which is designed to be a unit of exchange and stored as assets using decentralized technology. The price of cryptocurrency is affected by several factors such as:
- Government/legal issues;
- Market dilution;
- Bitcoin price;
- Restricted supply and demand/supply;
- The practicality of the currency and its ease of use and storage;
- Discernments of the cryptocurrency valued by the public;
- Media;
- Difficulty of blockchain;
- Scams;
- Trust in conventional systems;
- Amount of energy invested in – in the form of electricity – to fortify the blockchain.
On 27th December, the total market cap of cryptocurrencies has plunged from $621 billion to a stunning $567 billion, that is a staggering $54 billion overnight. What happened?
It is fair to warn you that investing in tokens or coins is risky because everything is unregulated, uncontrolled. This means that anyone investing in digital currencies should do it at his/her own risk.
Despite the fact that crypto-investors are left wondering about what could have caused the prices of cryptocurrency to decrease, the following are a few pointers that could have triggered that situation:
Manipulation of the market
There is a hint that one of the causes for the fall of cryptocurrency prices had to do with the manipulation of the market. Bloomberg recently reported that a group of about 1000 crypto-investors possess 40% of all Bitcoin. This indicates that a small fraction of people can easily manipulate the market if they decide to do it.
These investors could initiate a temporary situation that depicts a high number of transactions by selling and re-selling the cryptocurrency back and forth and on small margins.
This happens so that they can sell the digital currency at a high price and then go ahead to induce a crash by selling off large amounts of Bitcoin. This strategy can work, and the only way that it could be thwarted is if other investors take notice of this temporary situation and begin to sell off their own Bitcoins as well. If this doesn’t happen, the crypto manipulators are making a lot of money.
Altcoins
Bitcoin is the standard by which every other cryptocurrency is measured, and that means all altcoins are hedged in one way or the other along Bitcoin’s success. However, in the wake of the early surge in Bitcoins, a majority of the gains obtained in cryptocurrency trading can also be attributed to altcoins like Ripple, Verge, Qtum, Cardano, Tron etc.
This makes enthusiastic investors begin diverting funds from Bitcoin, thus destabilizing the Bitcoin market.
The fall of cryptocurrency prices could also be attributed to other factors such as:
- The confusion on Coinbase between Bitcoin and Bitcoin Cash;
- Regulation and hacking;
- Regulatory pressure and rumored forks which have surfaced on some fronts;
- Energy usage;
- Perception of the public.
Overall, you don't have to worry at all, holding cryptocurrencies for long term will bring you a lot of benefits, the technology behind is amazing and it's already changing the world, steemit being a great example.
This is just the beginning , 2018 will be a shinning period for crypto
Scary to me was catching more than one mainstream news story as BTC bitcoin was surging up that people were mortgaging their homes in some cases to put money in. I hoped they didn't panic sell when the market pulled back.
Exactly. In the crypto-sphere prices will have enormous swings upwards and downwards. In the long run the trend is still extremely positive. I've seen people saying "oh no, Steem came down from $4 to $2.60!". But that's nothing, in 2016 Steem went from $4.3 in July to $0.12 in November 2016. Oh man, how I would have loved to pick up some Steem at that time!!
You should buy now more, it's never too late :D
everything will back to normal after bitcoin price behave.. Bitcoin maybe misbehaving becaisr of bitcoin segwit x2.
Well @jwolf, I had a detailed discussion last night with my friend who invested a lot of money in different coins. Everything was going down as you mentioned and nerves were dying moment after moment.
Finally you wrote a brilliant and detailed answer to my confusion and learnt me a thing ups and downs are the part of the game but nothing is to worry. After all the coming world will ruled by BTC which is the standard of cryptocurrency.
The reason you mentioned are the ultimate logic behind the downfall of cryptocurrency;
Thank you so much for overcoming the tension of several newbies like me. You are a source of constant inspiration for me.
Please! keep updating us with your valuable thoughts.
My support and Respect is always with you.
Stay Blessed!
Good coment
Great written and we'll defined.
that is damn true, thanks for this information...
When the price drops, that's when you buy, not sell! And if anyone thinks the stock market isn't manipulated at all is naive. I've heard people say crypto is a scam and that we're being manipulated. Clearly they weren't paying attention in 2008...
I was literally asking myself this question last night and here I found the answer :) Thank you!
I am glad I helped.
Not only is technology behind these markets and will make them hold their own... I believe the brilliance of the new developer generation, far exceeds the control the Old generation had. Old dogs and old tricks have developed only a huge mess (on purpose or not), but the brilliant youth are forging a new way of life... they will win with energy, intellect, intuition and just outlasting the old ways. It is their generation and future, they will not stop, they will circumvent and outshine the old ways.
Thanks for breaking it down for newbies like me. I have spent time in the holidays trying to convince family and friends but all they hear is 'crash'... this info will help me explain it all better. I love Steemit and personally plan on staying here and off other social media entirely, whether the Steemit community pays me or not. A blessing is a blessing no matter the profit :) Thanks again. Following. Blessings.
The reason behind this post that Why Cryptocurrencies prices are falling from time to time is well introduce and informative
Well explained my bro. You are really acquiring a lot knowledge about cryptocurrencies these days. Bro I really need your support and I am happy that you will always continue supporting me.
This is really informative. Thanks for sharing👍
our questions are the same friends.
whether in the near future prices will fall again.
Why Cryptocurrencies prices are falling from time to time
a very good post my friend.
this time I want you to go to my last post. no one upvote my post
This is really nice! It is reassuring to understand the reasons behind what is happening in this crypto world!
Thank you for your caring work!
Cheers.
Thanks @jwolf for valuable information, your posts always helpful for not only newbies but also for all steemians.
It's damn truth!
You share a good information with us.
I believe, Cryptocurrency rise again.
I the world of cryptocurrency, those who know how to hold coin for a longer period of time won the game.
Good post! Was a good read while commuting.
Thanks for sharing this information, i have been wondering about the cause of the decline in price.
Just yesterday i discussed with a friend of mine and we had to encourage each other that it will pass and holding on and not panicking is the best. Thank you so much for this. Now i have another thing to encourage her with. Definitely resteeming.
This post has received a 2.93 % upvote from @booster thanks to: @jwolf.
I am so excited about crypto and the future of crypto. Still very much a noob, but my gut is telling me (nay, SCREAMING at me lol) that THIS IS IT!!
this is REALLY it!!!
I just wish more of my loved ones would listen to me.....sigh
Thank you for taking time to share your insights and understandings with us.
Cheers!
Let's see then what the new year holds
up's and down will continue i guess but thanks for the details from which it is falling :)
What you say is true but I think 2018 will be more active in crypto curreny world.
long term hodl needs patience and i lack this quality thats why day trader
)
anyway good effort regarding post
(
Well written and informative
a very nice and infromative post. Thankyou @jwolf for clearing my concept
Take Ripple as an example! Who could imagine that it would reach this high? Μore specifically $2.73 (30/12/2017). The Bitcoin's price has also fallen down
Good information n good post
Bitcoin is the standard by which every other cryptocurrency is measured, and that means all altcoins are hedged in one way or the other along Bitcoin’s success. However, in the wake of the early surge in Bitcoins, a majority of the gains obtained in cryptocurrency trading can also be attributed to altcoins like Ripple, Verge, Qtum, Cardano, Tron etc.
This makes enthusiastic investors begin diverting funds from Bitcoin, thus destabilizing the Bitcoin market.
The fall of cryptocurrency prices could also be attributed to other factors such as:
The confusion on Coinbase between Bitcoin and Bitcoin Cash;
Regulation and hacking;
Regulatory pressure and rumored forks which have surfaced on some fronts;
Energy usage;
Perception of the public.
This is a very well written article. This article will definitely the basic idea of cryptocurrencies how they work and advantages/disadvantages of it. I totally concur with the part that you proclaiming there are loads of manipulation in this area. However the websites selling cryptocurrencies are very smart these days you can make a purchasing order like when x currency's value is 1 dollar I will purchase 20 of them and as soon as the value of that currency falls and you can make a selling order stating that whenever this currency's worth is up to 2 dollars I will sell all of them! These very smart tools makes earning money so easily and I love it! Another facet that I concur with you again is that if you seek a long-term investment this is really going to be very beneficial for you. You will be the victor in the long run! I loved the article, keep it up the good work!
Best regards
Happy New Year
Happy New Year