From past couple of days we have seen the entire Crypto Market is sliding down hard. This has created a lot of panic in people. I have been getting a lot of messages over various platforms, everyone is getting panic about their holdings and no one seems to know, what cryptos they should hold to keep their funds safe from the disaster we are feeling right now.
There are couple of reasons for this crash mixed with hole lot of other things, i have tried my best to provide the accurate information and letting everyone know, what is happening to the market according to my opinion.
- We are in a Market We all need to accept one thing, despite of crypto currencies & blockchain technology being a revolution, we are still operating under a market, where it is based upon two fundamentals "supply & demand". If there is enough demand and other person is willing to pay a higher amount that is what we know as market going up and reverse of this is always possible no matter what the technology is.
- South Korea Banning Crypto Trading
- China Banning Crypto Mining
- Panic Selling
- Long Term Holdings are Good
- Is it a Bubble?
- What can you do, when market is crashing hard?
According to many news sources, South Korea has decided to put a ban on crypto currency trading. Majority of banks in South Korea has decided not to process bitcoin transactions, which has resulted a panic not only in South Korean people but also worldwide as many investors in South Korea are already trying to take their investments out from crypto market. However in recent update this decision has been reversed because of people's protest against this government action, you can read more about this news here
Other reason of this hard crash is Chinese Government has announced the ban on crypto currency mining. This is not the first time china has taken a negative action against cryptos. China has always been a bully when it comes to crypto market. We know that majority of mining is being done by china itself but that doesn't stop other countries to step-in and fill the gap. For the matter of fact, recently a new crypto was announced by Russia by the name of "Russian Miner Coin (RMC)" this company is partially owned by Russian Prime Minister Mr.Putin with the vision to bring bitcoin mining to Russia and to compete with Chinese miners.
This is a major point. Believe it or not news plays a big role in market movements weather it's crypto or traditional share market. There are more people in crypto to make money rather than believers. Just like we know a trader's point of view is always to buy at low and sell at high. There are people who doesn't understand the fundamentals of blockchain technology at all. So, it's understandable for them to be panic and keep on selling when market is at down trend.
If you are one of those people, who learn about the technology before investing in any crypto currency and try to hold them for longer period of time. You should be safe even when the market is going down like now. As what many people believe and also in my opinion, cryptos are here to stay. Market movements like these would not effect any of the investments which are being hold but it also depends upon, which crypto currency is being hold and what kind of solution it's providing to the world.
In my opinion, I would not deny the fact, for some cryptos being a bubble but at the same time not all of them. We need to understand, Blockchain technology is all about freedom. One thing it brings to the table is anyone can build and role out their own coin depending upon their knowledge and will. That makes it very risky, specially for people who do not understand this technology. But calling Bitcoin a bubble, who started all of this and introduce us with blockchain technology is not justifiable.
If you believe in the technology of a coin that you have invested in and holding it for long. Then your are pretty much okay. but still There are number of things which can be done such as taking your crypto to a stable currencies like: USDT, BitUSD (I would anytime prefer bitUSD against USDT, when it comes to a stable store of value).
If you are unable to move in anyother crypto for stability then holding your funds in Bitcoin is always the safest option, in my opinion.
Note: I am by no means a financial adviser, i like to write about my own research and experiences, Always do your own research before investing in any crypto currency.
If you haven't signed up on Binance Exchange, It is highly recommended, my ref link: https://www.binance.com/?ref=10782921
A very helpful post @bunnychum. Everything you say makes total sense. Two things stand out for me -
1)"Longterm holdings are Good". Lot of changes are happening, regarding cryptocurrency and cryptos are changing many things. You got to allow the sea to settle down a little. 2) "Is it a bubbble?" - i agree with you that this is not a bubble. Crypto balances imbalance of wealth by creating an alternative system of income and expense. This way it puts the wealth from wealth pockests back into circulation, creating more unique opportunities. It is here to stay. :)
Followed you. Thank you for your support, @bunnychum :)
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I know this could be a very late response by so many days, but then, better late than never.
There is a lot of insight that you could get from Bitcoin.org's FAQ. Maybe reading them will certainly help. The FAQ has this obvious question which asks if Bitcoin is a bubble?
I liked the way how it begins, stating
"A fast rise in price does not constitute a bubble. An artificial over-valuation that will lead to a sudden downward correction constitutes a bubble".
It continues saying there are so many reasons as to why the market price could increase or decrease like reasons for a drop could be
Somewhere I do feel we have all been a part of it for people to call it a bubble. What was meant to be a revolutionary digital currency has become the most fancy and lucrative commodity of trade. True, I accept currencies are traded in real life as well, but this has taken it to a whole new dimension.
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Am sticking to your advise, thank you
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@davidekpin thank you for appreciation :)
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Sorry for the long reply, but I have to get this out of my head:
You're forgetting something very important in all of this and that's the fact that BTC futures went live last month on the 10th and the first set of contracts today, the 17th of January. Since the price was fixed at about $15k USD back in December that had consequences on yesterday's market, apparently big ones.
Normally this would be super risky for the types of entities that normally do this sort of stuff, BTC moves fast and it is rather unpredictable, but it's full of new money from new investors who don't really know what the hell they're doing. What does that mean? If you're a massive hedge fund looking at crypto in early December you'll probably realize you can flip the table on the market by first making, then profiting from, chaos. This would be done by betting on the short at current market price, but also actually buying the amount that same day. Since you're holding both the contract and the BTC, effectively this means that you cancel your risk and reward regardless of what the market looks like in January. Under normal circumstances this would be a pointless waste of time, but crypto is new and exciting stuff and you're out to make a killing.
Since you hold a rather large portion of the market (you are now a very large whale) you can dump all that BTC right before the contracts expire which will set off all the red flags, bells, whistles, and other such things that happen with weak hands. Remember, you know the majority of these people are uneducated and know little to nothing about the financial world. You wait patiently, possibly chuckling to yourself at how effortless this is, before you then buy back whatever amount you owe on the futures at the supremely low market price. Subtract that price from the price that you sold at, this is your total profit.
See, the thing is, none of this was exactly a secret to anyone. Crypto is unregulated, there's nobody there to say "you can't do that" and to protect the uninformed from losing their life savings. This is what the crypto world wanted, thinking it was the way of the future and the ultimate way to stick it to the man.
This is also why what we've seen on the 16th of January, 2018 will not be the last time it happens.
China's situation is by no means a coincidence either, I can guarantee you that they were well aware of this and well aware of what was coming. Poor timing is not something the Chinese do, I can say with confidence (even though I have no evidence to support it) that yesterday was quite intentional. While there have been hardliners in the Party that absolutely hate this whole cryptocurrency capitalist nonsense and want to see heads roll, their votes can easily be secured by throwing them bones now and again. It's politics and they're zealots, so hey, why the hell not. That's one bird down, but what about the other one? What could China possibly want with the crypto world on its knees?
Did I mention I like to write stories?
Yeah, if I were writing this story this is where things would get interesting. I've been thinking about China and cryptocurrency for awhile, off and on as the days go by, but their announcement about the miners really got me to think a bit more carefully about the whole thing. Odd that they start complaining about electricity now, China's supply isn't exactly completely inundated with demand because they're building new power plants like they're going out of style. Miners hogging the juice is just a small price to pay for Chinese manufacturers having increased sales overseas, the miners create a demand for things like video cards in foreign markets to compete with their Chinese counterparts. So why? Now this is all pure speculation, I'm just spitballing here, but I think it was part of a wider plan. A plan I'm going to guess involves something dirty or something Korean that the PRC doesn't want to get caught with. Telling the miners to pack it up affected the market, I think that was a test to see if they were good to go. At this point you may be wondering if I'm off my rocker and that's possible, but really, think about it... What's crypto's biggest and longest-standing advantage?
If you were funding something you shouldn't be funding then how would you do it? If you tell the American president that you're done supporting your pesky little neighbor, how would you still put cash into the regime so it doesn't implode and create a mess on your border? How do you get the money to do stuff like that, but cheaply? Why, that's easy, just wait until the BTC futures Whalefest 2018 plays out and then just say you're going to do something! Prices have dropped and the crypto world is reeling from a one-two punch right to the gut, now's the time to buy in and make it disappear into the digital abyss.
I'll tell you right now, if crypto existed when the CIA was playing with the Contras I guarantee you they would've jumped at the opportunity to use it. Some might consider this a big black mark against it, how could the government use something so pure and free for nefarious means? Same way you, I, or anyone else can do it; it's unregulated, this is what crypto was meant to be.
Expect to see these kind of things to happen from here on out. I can't very well prove the Chinese end game here, but it should be obvious that what we experienced yesterday is a sign the market is working exactly as intended with or without my wild imagination making it more exciting.
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@jixijenga excellent analysis mate, i really like you thought process. It's quite obvious actually, specially when a power emerges, "authorities want control"... It's just matter of time, when it will be become what it's meant for... :)
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Hey, thanks! At this point I'm up in the air about what authorities want to do or why, but I was discussing this with friends and I'll say here what I said to them regarding legislation here in the US of A:
There's a lot of weak hands out there who won't be quick enough to catch it, but they'd happily contribute in the panic. Just like with this dip I wouldn't expect entities here to buy in when it hit the floor, and believe me, crackdown here on crypto would shatter the markets. My advice? Stay vigilant, keep your head on a swivel, never exist a conscious moment in condition white. That's not just with crypto, that's with life, if you train yourself to exist at a higher level of alertness it will become your natural state.
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I agree with your bro, we shouldn't get panic, It's a market and when it goes up, it goes down as well.
you just need to be patient enough :D
RESTEEMED
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Great post and you make some very informed and astute observations
If I may just add, in the case of the Chinese, I believe that reading between the lines, the govt. wants to mine and ban individuals from mining. I've seen HUGE mining operations there running thousands of servers and would hazard a guess that the majority of new bitcoin is mined there. Chinese dont like people having power, they like to keep it for themselves !!
Secondly, I believe last year was just a wave of pink unicorns and people jumping on the crypto bandwagon. Hopefully we are seeing a levelling off in the boom or bust 'wolves of crypto' getting their fingers burnt and moving away.
South Korea won't ban trading. Theyre starting to regulate it and stop anonymous accounts but thats all. If people comply with this, they will leave it alone I believe.
Crypto needs stability and steady sustained growth to become acceptable and a viable alternative, all this crazy trading ....just a craze and fad does it no favours. Like I said, hopefully now things will calm down.
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@nathen007 thank you for wonderful insight, i truly believe in knowledge sharing...
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An open source world is exactly what we need :-)
You have fabulous day :-)
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You r right, but I think you forgot this: Huge Lunar New Year sales correction in the market, this Luna New Year is the Christmas of the Asian and Korean people. They sell a lot of cryptos for the presents, gifts and their travelling: More info can be found here: https://www.forbes.com/sites/ywang/2017/01/26/worlds-largest-human-migration-begins-chinese-new-year-2017/#3a6d5502999a
HODL and after HODL @tothestars
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@tothestars Thank you for bringing this up. I completely agree with you for skipping this... :)
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The market is so thin currently that even a minor medium-size fund exit can considerably impact overall crypto markets balance in short-term. Usual event in the cryptoworld if you have been following it since 2010. .E.G. market corrections of 2013!
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umm right bro we should learn about things of crypto and then invest in and also we should also have patience when the the dip occurs
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To think that I was thinking along some these same lines just yesterday and even penned down some thoughts I plan to share on my blog later, I must say this was very insightful and helpful. I really hope Cryptocurrency stays! It indeed speaks of freedom. Plus I like your thoughts on not all cryptos being a bubble because it is really tiring to keep hearing people say "It is a bubble"! So I agree with you on not all of them being that way! The fear is because blockchain makes it possible for anybody to roll out their currency as you've rightly stated, but there are certain factors to consider when planning to commit to or invest in cryptos, and when I looked at the features of Steemit, I had a strong believe in it and decided to join in. I'm still learning though, but being around information like this and more makes it all the more beautiful! Like I always pray, I truly hope steem grows exponentially. Thanks once again for this lovely post. Looking forward to reading more from you.
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@euniceokoh thank you, i really appreciate your comment and thought. And yes you're right #Steemit is in every way a perfect and one of the most powerful example of blockchain technology...
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Youre right about anyone being able to roll out a blockchain and currency BUT, people need to examine it and decide if it has value. Let idiots guess and speculate and people with an ounce of sense invest where there is a true value, a use and application. If there is no tangible use for a token/crypto, we might as well just trade pokemon cards !
Steem for me ticks all the boxes, it has value and worth and it is tangible. Let it grow strong roots slowly and the whole steem ecostructure will develop and expand, and along with that, the price !
and most importantly, its actually a lovely friendly community :-)
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I think you made a balanced analysis of the cryptocurrency market thanks for the help.
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You definitely have some solid reasoning. I don't think the closing of Bitconnect helped as a large portion of the market was involved with it (not me!) and they may well be pulling out of crypto to float themselves after losing on Bitconnect.
I agree too that some coins are definitely in a bubble. Utiility, community and a solid team will be what I look for in coins that I thik have long term potential, as well as a working product.
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Turbulence is part of the game, great and stable technologies will emerge from this market.
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@chesatochi true indeed... :)
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I have been buying cryptocurrency all day long. Everything is on Sale.
The only thing that I have about all this is that my Cloud mining contracts are paying me less Bitcoin.
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@arunava Bitcoin difficulty has risen already... that's just part of the game called mining... more miners more difficulty...
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Wow, great post. You are right, but I think you forgot this: Huge Lunar New Year sales correction in the market, this Luna New Year is the Christmas of the Asian and Korean people. @bunnychum
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SBD
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Nic post
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Hi, A whale and lovely person has given me some steem power to help newbies so I'll do you a deal....If you write me an ORIGINAL (and i can check) article about anything youre passionate about, and include 2 original photos that YOU have taken, i'll give you a 100% upvote, resteem and 0.50SBD ? Want to take the challenge ?? :-)
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Congratulations @bunnychum, this post is the tenth most rewarded post (based on pending payouts) in the last 12 hours written by a Superuser account holder (accounts that hold between 1 and 10 Mega Vests). The total number of posts by Superuser account holders during this period was 1503 and the total pending payments to posts in this category was $17826.39. To see the full list of highest paid posts across all accounts categories, click here.
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This post has received a 15.48 % upvote from @booster thanks to: @bunnychum.
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You got a 2.16% upvote from @upme requested by: @bunnychum.
Send at least 2.5 SBD to @upme with a post link in the memo field to receive upvote next round.
To support our activity, please vote for my master @suggeelson, as a STEEM Witness
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danke )
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