The cryptocurrency markets have been in “dire straits” the last few months. I want to remind everyone this kind of activity is expected and it is happening for several reasons. It does not mean “crypto is dying,” like the FUDsters tend to repeat ad nauseum.
Also read: The New Crypto Aristocracy has Arrived with Peace and Anarchy
For starters, there is nothing fundamentally wrong with the technology, except the myriad of scam coins out there, but that is a different story.
Certainly, there are disagreements on how to scale bitcoin and allow it to grow into maturity, but this does not mean the underlying technology has failed. In this sense, the markets have only entered into a bearish sentiment as a result of a mixture of psychology and negative news. The real bitcoin, bitcoin cash, is working perfectly fine and is ready to be adopted by the multitudes.
Why are the Markets Sufferings Then?
The Asian markets have been one of the causes of recent valuation losses. Around two months ago, the government in South Korea said they will be implementing bans on “anonymous accounts” in order to prevent “criminals and children” from trading the digital currency.
Furthermore, the U.S. Securities and Exchange Commission subpoenaed Bitfinex and its sister company Tether, which also occurred at the start of the year. The SEC wants to scrutinize whether money laundering is taking place and whether there are scams being perpetrated by the companies. More recently, the SEC released statements warning people about the fraudulent nature of the ICO industry. Then they issued more subpoenas against both ICOs and crypto hedge funds, further detonating the market.
These warnings and threats have caused traders to react emotionally. This has naturally led to panic and concern, causing many people to sell coins. The sell off has, of course, perpetuated even more fear, prompting the current bear market sentiment. This is typical market psychology, and newbies will fall into the trap and realize nasty losses.
Crypto Markets are not for the Faint of Heart
I am not concerned, though — and you should not be either. There have been panics and sell-offs like this before, based on similar occurrences. At one time, bitcoin shed 90% of its value. It recovered after a year.
Government intrusion in the space cannot stop crypto, and undergoing dramatic growing pains is natural for any emerging technology to experience. This means to buckle up and enjoy the ride. This is all part of the game, and it takes some courage to either hold coins or spend them on everyday necessities. Indeed, It could be a while before the markets correct, but just hang in there. Crypto markets are not for the faint of heart.
Time to buy!
What do you think about the current state of the markets?
Images courtesy of Shutterstock, The Balance, and Hackernoon
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