Since a quarter or so, the crypto market has been experiencing bloodbath. The crypto space is going through major developments and updates, which created the whole tantrums amongst the cryptizens. It’s a sudden and steep decline when it almost decreased by 50% from around $6500 USD to around $3500 USD. This has happened after the BCH Hard fork took place in the mid of November 2018. But this is not the only reason of the downfall.
Recently, the Bitcoin hash rate has also started dropping off because many miners are not able to bear the mining cost after the BTC price fall. According to reports the average BTC mining cost nowadays is around $6800 USD.
It has been noticed that to avoid paying huge taxes, the investors are selling off their cryptocurrencies before April. People have recently realized that they are stuck with large tax bills and they are left with two options- either pay the tax or sell the cryptocurrency off. If the person is buying and selling the cryptocurrency in the same financial year, the individual would be taxed on short term capital gains which might be as much as 39% depending on the taxation bracket. Even airdrops and bitcoin mi ing are taxed.
A tiff between the two groups of BCH communities (Bitcoin ABC and Bitcoin SV) led into the bonfire of the ideological debate. The hard fork finally took place on November 15, 2018, resulting in two competing chains Bitcoin ABC and Bitcoin SV. As a result, the value of BCH has suffered just as much as the rest and the hash rate war caused serious uncertainty in the market and this might be the reason for cryptocurrency market crash.
Bakkt, a company owned by the New York Stock Exchange, recently announced their decision to postpone the launch of their highly anticipated Bitcoin Futures trading platform from December 2018 to until late January 2019. To back this up, on November 21 they released a positive update on why they are now prioritizing Bitcoin.
Both the SEC and the Commodity Futures Trading Commission (CFTC) has adopted the perspective that while Bitcoin is not considered a security, various ICO tokens are, subjected to individual scrutiny. Jay Clayton, The chairman of the U.S. Securities and Exchange Commission (SEC) reiterated the regulator’s stringent stance on Initial Coin Offering (ICO) compliance in fresh comments and underlined the necessity to conduct public token sales with the U.S. consumers in line with the SEC guidelines.
Global pressures have also taken their toll on topics such as trade tensions, central banks tightening up policies, as well as Brexit contributing to declining market liquidity. Even Google has banned cryptocurrency ads, which might be one of the reasons for the fall.
The U.S. Department of Justice (DoJ) has focused its investigation crypto market manipulation on whether or not Tether (USDT) was used to artificially inflate Bitcoin (BTC) prices during last year’s momentous rally. In late October, Tether redeemed and destroyed 500 million USDT from its treasury wallet; the action provoked yet further controversy given Tether’s recent loss of its U.S. dollar peg.
Fred Wilson, the co-founder of Union Square Ventures stated that Bitcoin might form a bottom at some point and is a sure buy when it does, although it is clear that he wasn’t sure whether the bleeding was over with in regards to Bitcoin specifically.
Mati Greenspan, eToro senior market analyst, thinks that since the central banks are raising rates again, money may become scarce and people are taking a lot of their investments off the table.
Gabor Gurbacs, the digital asset strategist and director at VanEck, told that traditional markets had endured corrections as businesses looked to consolidate before the end of the year.
Anthony Pompliano, the host of popular crypto podcast and newsletter “Off The Chain,” thinks that the selling pressure from funds and ICOs could be the driving factor for this recent downturn. But Bitcoin is still the best performing asset class in the last 5 years.
Oanda Corp.’s head of trading for the Asia Pacific, Stephen Innes thinks that the time to call capitulation has not come yet. He believes there are a lot of influencers in the game of ups and downs. But if it starts reaching downward to $3000 and below, then there’s a probability of people running for the exits.
Not only the Fundstrat co-founder Tom Lee, but there are many more crypto enthusiasts who are optimistic towards the crypto market. Vinny Lingham, a respected blockchain entrepreneur and industry visitor has made his thoughts clear with his pragmatic yet optimistic statements. He said that the market has had too many pipe dreams and Lambos in the past couple of years. The climate can change once more with the solid use cases emerging from the company’s development cycles, they can gain traction and prove the sound business value to make a difference.
This looks like the mild phase of downfall, after which it is expected to surge upwards as 2019 and the years to come has abundant things in store that involve blockchain and cryptocurrency invasion.
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2019-06-12 13:07:32.453525 | 2 min
2020-01-08 17:14:06.802903 | 2 min