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In my opinion, there are at least 7 reasons behind the decline in Bitcoin from its highest point ($ 20,000) at the end of 2017. The decline in prices means that the level of supply is greater than the level of demand. That is, many people sell (for various reasons) rather than buy it.
Let's discuss together:
1. Regulatory Pressure
Surely you already know that some developed / developing countries have provided strict regulations, or even blocked crypto currencies as a whole, starting from trading, ownership, exchanges, etc. Some of these countries are: South Korea, China, India, etc.
With the various regulatory pressures, surely the confidence of market participants also drastically reduced, and the decline in demand occurred.
2. Very High Volatility (Not Safe)
Lets try to see the volatility graph below :
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The above volatility chart was issued by Goldman Sachs a few months ago.
What can we take?
BTC has the greatest volatility compared to other assets such as WTI, Silver, Gold, S & P 500, and even when compared to Forex volatilits it is very different.
High volatility makes the danger of investment bigger, even though the opportunity for profit is also large. So, this asset is not safe to use as an investment, especially for beginners.
3. There Are Many Sprung Altcoins
Well, if we look at the statistics from Coinmarketcap.com, we can see that there are more than 2,000 Altcoins that have been created today. Moreover, many of them have very large total capitalization. In fact, there are various Altcoins that offer various advantages that are not owned by Bitcoin:
- BCH has enormous scalability.
- XRP and XLM are able to execute transactions instantly.
- EOS claims to be able to process 1.5 million transactions per second.
4. ICO SCAM
With the increase in fraud that was under the guise of ICO, and has even earned hundreds of millions of dollars in investment funds, market players are increasingly distrustful of crypto currencies and this kind of fundraising.
5. Hacking and theft
Just say Mt. Gox, Youbit, and Coincheck have experienced hacking on their platforms, and resulted in hundreds of dollars and customer funds floating.
6. Block from Large Media
Google, Facebook, Instagram, Twitter, Weibo China, and even Baidu have committed to block content related to crypto currencies, including exchanges, mining, ICO, etc. With the blocking of large media, of course people's interest and trust has diminished.
7. Other crimes
Various other cyber crimes such as the emergence of a variety of Malware that are able to use our computer resources for mining without us knowing it, until various frauds under the guise of a Ponzi scheme have undermined consumer confidence.
Then, it is no secret that Pump & Dump schemes often occur especially in the scope of the crypto currency that was just released.
Of the various reasons above, of course the interest of market participants has drastically reduced, and in fact more offers are available, so the price of Bitcoin and other crypto currencies has dropped dramatically.