The eight reasons why the Cryptomarket crashed! Why hodling is your best option.

In the last couple of weeks Bitcoin has taken a massive dive. From it's all time high on the 17th December last year of USD $ 19,783.06 to now sitting on $8712.05. A decrease in value of just a faction off 60%. There have been many reasons as to why the price of Bitcoin has fallen. I will list seven of those reasons in as much detail as possible and provide links to sources of information, which may help you in your dealings within the Crypto space in the coming months. I'll try to keep this article in sync with the actual timeline and I will try to show you how all seven reasons have contributed to the overall decline in Bitcoins price.

Reason One.
Going as far back as August last year, serious concerns were raised about Tether and it's relationship with the Bitfinex coin exchange. A series of videos (on Youtube) started to question not only Tethers viability but its ability to raise coins seemingly out of thin air. A pattern started to emerge each time bitcoin had a sharp drop, Tether would print out more coins which appeared to boost Bitcoin to once again rally. This pattern has repeated itself several times over the last eight months. On the 20th November last year Tether was hacked $30 million. It made no attempt to reassure it's many holders of it's coin. It did not release any statements regards what it was doing to find the hackers or what it intended to do with any possible upgrades to it's security systems to prevent future hacks. Yet despite all this, it magically re-issued a further 50 million coins. There were a whole series of events that raised some very serious concerns. I will add one more as Tether itself is worthy of a whole article by itself! At the beginning of last year 2017 January, Tether had $1,000,000 coins in circulation. By November, it had $700,000,000. This in of itself should of raised all sorts of red flags! With the US regulators now in picture. The faster that Tether and Bifinex is removed from the crypto markets , the better. Take a look at the above photo. The administrators of both organisations live by their companys' logo." The new way to move money"- right into their pockets. All of this in my opinion contributed to at least 20% of the fall of bitcoin.

Reason Two
The second reason that Bitcoin has taken a tumble is related to the Futures markets. In the middle of the December last year two company's offered future contracts. With CBOE's contracts expiring on the 17th of January and they were on a bearish position. In my view they had an incentive to manipulate the market to ensure that bitcoin remained under it's quoted price of $20,000 USD. The same again could be said of the CME group who closed their contracts on the 26th January.Though I believe their contracts only numbered in the hundreds, it had some bearing on the price of bitcoin.
However, this may have contributed to 10% of Bitcoins drop.

Reason Three.
As far back as 27th December last year news started to circulate that South Korea may in fact close several of it's coin exchanges. Then on the 10th of January, South Korea's Justice minister Park Sang-Ki made an announcement stating that a bill was being made to be put forward to the Government to ban all trading of Cryptocurrency. This turned out to be false and he as minister was removed from office. However, because the genie was let out of the bottle, the Government decided to regulate the exchanges regardless. The South Korea's have now re entered the crypto space, so most of what occurred was total FUD.This would of caused at least 20% of Bitcoins price to fall.

Reason Four

Though I believe that is would be minute in terms of it's overall impact on the price of Bitcoin, it added to an already declining Bitcoin price. It also added a little bit more to the fire. India's Finance Minister Arun Jaitley made a statement in the Indian Parliament that he was to clamp down on the illegitimate use of cryptocurrency and the adoption of blockchain technology in India's future economic growth. The local media misinterpreted this statement and made press releases through both written form and in radio broadcasts that " India will ban cryptocurrencies!"
Nothing could be more further from his actual statement! 3% Impact on Bitcoins falling value?

Reason Five.
Though again I don't think this had an immediate effect on Bitcoin. It came at a very bad point. We all know that Facebook has some major plans into the future. Yes, it has banned all forms of Crypto on it's site. Why? Because at some point it intends to launch it's own coin. It is preparing itself to take on Youtube and several other social media sites.2% impact on Bitcoin?

Reason Six.
Last week on the 23rd January the largest Japanese currency exchange was hacked to the tune of $500 million dollars. Making it the largest exchange heist in history! In the space of a year there has been several large hacks and several losses through bogus wallets or dysfunctional wallets. However with this latest hack, I am certain that this has instigated a large sell off by very nervous traders. I attribute that this cause a further drop in Bitcoins price by between 5-10%

Reason Seven
Absolute greed. Since December last year there has been an incredible number of people joining the crypto markets. Several exchanges had to stop accepting new clients. I think BINANCE stopped accepting new clients because it was inundated with over 35,000 request per day. Most new clients had entered into the market with grandiose expectations. The stories of people putting their house on the market to buy Bitcoins and other altcoins was too numerous to count. Sad stories of others who invested their life savings into this space and were burnt. Most had not done due diligence or tested the market on a small scale first. I do feel for them and their losses. Must be a horrible feeling!
I'll pass on a parable. I use to dive for pearls. As a child, when learning to free dive in the deep. My grand father use to always tell me a story about greed. Long ago, a certain diver use to have a serious problem when diving with other divers. We use the sun light behind us when diving as pearl shells sometime will open a fraction. If the light is right, occasionally you will see a glint, so rather than pick other shells, you swim and gather that particular shell; because you know it will have a pearl in it! In deep diving you have to return to the surface slowly so as not to get the bends. Being on an isolated island, bends is a death sentence. This person saw a glint but was at his limit. Rather than return to the surface he continued along the bottom to this particular shell. When he made his way back to the surface it was already too late. He drowned. With the pearl shell tucked in his diving bag. Lesson of the story according to my grand father. When diving, air is the most valuable thing you can have. You can always dive for another pearl!

Moral: People get blinded and start to have a fixation (thinking of the pearl and forgetting about what is truly valuable, in this case - air) on huge returns. Yes, everyone wants a huge return on investment but every once in a while, take a breather and relax. The only way that you make a loss with Cryptos' is when you sell at a loss. With the incredible amount of FUD and disheartening news over the last couple of weeks, its easy to forget, the pearl is still waiting there for you. Grab some fresh air, relax and ready yourself for another so called dive.

Reason Eight

On the 16th of January Bitconnect collapsed, taking with it a huge amount of investors money. Before the collapse it's coin BCC had a trading value of over $350 USD and sat in the top 50 coins on Coinmarketcap( at one point it was in the top 10). In the space of a day it's value had fallen to just over $35 and eventually on the third day it had fallen to 30 cents. As of this moment it is sitting at $4.45 and has plummeted down the list to now be sitting on just outside the top 200 coins. Not only has this spooked future investors and the negativity being sprouted through the media has had a detrimental effect on the Crypto markets overall. I would consider the media as another reason for this latest crash but will not include it as part of this list. Bitconnect has now been proven to be a ponzi scheme. Millions of dollars have been lost by ill informed investors. There have been reports from as back as July last year that this scheme was a ponzi. It was to good too be true and as it turned out, IT WAS!!!!!

Why hodling is the best strategy at the moment!

Because its the only viable strategy! Most people during this period do not know whether to laugh or cry?
The only advise that I can offer you is this HODL, HODL,HODL and if you didn't hear me the first time HODL!
I believe that on the 14th February there may be another fall in the markets. Provided a few things happen, personally I think the markets will start to rise possibly the 21st February but I feel that the markets will certainly rise on March 1st.

Images sourced from free images, pixabay and fotojet.

links:

https://www.coindesk.com/cboes-first-bitcoin-futures-contract-expired-today/

https://www.cnbc.com/2018/01/17/as-the-first-bitcoin-futures-expire-price-and-volume-concerns-arise.html

https://www.express.co.uk/finance/city/913234/bitcoin-ban-blockchain-news-India-BTC-finance-minister-arun-jaitley-cryptocurrency

https://www.theguardian.com/technology/2017/dec/07/bitcoin-64m-cryptocurrency-stolen-hack-attack-marketplace-nicehash-passwords

http://fortune.com/2017/12/17/bitcoin-record-high-short-of-20000/

https://www.coindesk.com/cboes-first-bitcoin-futures-contract-expired-today/

https://www.cnbc.com/2018/01/17/as-the-first-bitcoin-futures-expire-price-and-volume-concerns-arise.html

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