Cryptocurrency markets took an abrupt downturn on 14 November, with prices of leading cryptocurrencies Bitcoin and Ethereum down by over 10% and 12%, respectively, over the past 24 hours. Looking at the top ten cryptocurrencies by market cap, all show a similar performance. The crypto market is no stranger to volatility. When Bitcoin follows the bear or bull, so does the rest of the market… as was seen during the Crypto Gold Rush of 2017, Bitcoin’s meteoric rise took the altcoin market along for the ride.
Bitcoin’s growth over the past 7 years shows enormous growth despite the setback from the high of December 2017 experienced in 2018, a fact we cannot ignore. The fundamentals are changing as more governments, institutional investors and regulators get involved in the cryptocurrency and blockchain markets. See Price Predictions.
Snapshot of prices at time of publishing source: Coindance
So what are the forces that may be driving the dip, we hear from several cryptocurrency and blockchain experts.
Marshall Hayner, Founder of Metal Pay:
To put it plainly, today’s dip is likely indicative of the fact that the most recent round of crypto speculators are capitulating. Thanks to revised short-term expectations that call into question the idea of a bull run by the end of the year, many are likely taking their chips off the table. A key takeaway from this most recent decline is the continued need for crypto liquidity, which will likely be found in future stages of industry maturation, hopefully in the form of adoption by retail consumers in their day-to-day activities.”
Donald Bullers, North American Representative for Elastos:
Price volatility is not unusual in the crypto landscape — however, today’s dip is significant enough to prompt industry players to stop and take stock of the reasons why. It’s safe to say that Bitcoin Cash’s upcoming hard fork was stirring uncertainty amongst crypto investors, and forecasters across crypto and traditional markets alike have predicted a prolonged bear market heading into 2019. Crypto investors have proven to be highly reactive to changes across the landscape, and this dip could be the most recent case study of that phenomenon.”
One relevant factor in the price drop is that bitcoin doesn’t have a monetary policy in place to mitigate downside volatility. That means that when demand contracts, there needs to be a process in place for contracting supply. Otherwise, market prices will fall, as we’ve seen today. As cryptocurrencies become more sophisticated and learn from the volatility and risks of older, more established coins, they should be designed with constraints in mind that help fight against sudden price dips like this one.”
Casey Kuhlman, CEO of Monax Industries:
Crypto price slumps can often create misconceptions about the future of our industry, but perhaps what is most important to remember during periods of volatility is that the underlying blockchain technology solves real-world problems across the real economy. Crypto prices may rise and fall for reasons that are difficult to identify, however, the blockchain industry will remain strong and continue to grow.”
Frank Wagner, CEO of INVAO:
Price volatility in the crypto market is nothing new, from the highs seen in late 2017, to the most recent slump. These price changes can often seem drastic, especially to traditional investors, however, this impression of instability is largely caused by the fact that the crypto world operates at such a fast speed in comparison to traditional finance. Anything that happens in traditional finance can also happen in the crypto world but at a faster pace. The machinations of the market will continue to work and it is widely anticipated that prices will level out again in the foreseeable future.”
Rohit Kulkarni, Managing Director of Private Investment Research at SharesPost:
Recent cryptocurrency trends reflect an amplified view of the broader macro volatility and uncertainty in crypto regulations. Bitcoin has become a safe haven holding for long term crypto bulls, while crypto speculators are jumping off the ship from ETH and XRP. We believe that there are three likely catalysts that could result in a crypto market turnaround in the next six months: There is greater clarity from regulators which could embolden the market; A select group of blockchain startups that have completed token offerings in the past year finally announce innovative commercial products; As smart money and institutional capital keeps piling up, investors pull the trigger and call the bottom of the market.”
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