The crypto markets over the past few weeks have seen a decline that has left many scratching their heads. Why is everything losing value? Did I make the right decisions? What will happen in the future?
It is estimated that only about 5 million people on the planet are even aware of cryptocurrencies and actively trade. Many of those just started in 2017 and are unaware that this has already happened several times:
The backbone of what we are witnessing is a standard market stabilization from the insane bull run of 2017 in which a lot of fresh money entered the markets. Those institutions and individual investors who have been in the game and do their research are now extracting their profits.
The newer investors that are just getting their feet wet, generally speaking, are blinded by the possibility of profits. Most do not research the coins they invest in and simply react to media headlines. They will panic and buy at the highs and sell at the lows.
Mainstream media completely understands this factor of how human psychology plays a massive role in the markets and they will push headlines to swing trading in favor of the institutional investors who fund them. These topics are meant to cause panic selling:
India: Bitcoin Prices Drop As Media Misinterprets Govt’s Regulation Speech (article)
Britain’s largest bank/JP Morgan bans buying crypto with credit cards (article)
China blocks foreign crypto exchanges (article)
Deutsche Bank advises against buying Bitcoin.
Facebook bans all ads related to cryptocurrencies
Bitcoin drops on Tether subpoena.
- North Korea hacks Japanese crypto exchange and makes off with $530 million.
Bad News is Still Good News
The recent $530 million hack taken from Coincheck by North Korea has actually boosted Japanese interest in cryptocurrencies. Bitflyer, Japan’s largest crypto exchange by volume, is seeing a rapid increase in the number of registered users. “Ironically, many people got interested in cryptocurrencies after this incident,” an executive of the exchange told news.Bitcoin.com.
Good news or bad news, awareness to cryptocurrencies is spreading and this can only be good for the market long term.
Another important and often overlooked factor is the blockchain technology that initially spawned cryptocurrencies.
Blockchain Is Rapidly Changing the World For the Better
Blockchain’s Greatest Impact Will Be in Developing Countries, Says UPenn Lecturer
How cryptocurrencies can reduce global poverty
Blockchain technology is becoming crucial for space exploration
Expect 2018 to be a defining year for the crypto space as we are going to see a lot of action, both good and bad.
A lot more institutional/individual investor money will enter the ecosystem.
Many of the useless, get rich quick schemes will become exposed and unravel (the Bitfinex/Tether scandal is coming).
The blockchain/cryptocurrency platforms that bring real value to the table will emerge, and just how the internet changed our world post Dotcom bubble, so too will blockchain.
Take every article pumped out by mainstream media with a grain of salt and do your own research. Most of the time, they are trying to scare you into selling (or buying). Remember, it is not so much about the cryptocurrency, but about the blockchain project that currency represents.