Why is the crypto market bull still asleep?
In the West, the New York Stock Exchange, Microsoft, and Starbucks formed an initiative called BAAKT to improve the usability and adoption of cryptocurrencies.
In the East, the Japanese and South Korean governments disclosed their intent to strictly regulate cryptocurrency exchanges as regulated financial institutions, and the government of China spent over $3 billion to finance blockchain startups.
But despite the inflows of positive news and events in August, the crypto market bull is still asleep with a lack of momentum.
What feeds the crypto market bear?
As always, a wide range of factors and an amalgamation of many events occurring throughout 2018 contributed to the market correction:
- Mt. Gox massive bitcoin sell-off
- Possible manipulation by large-scale traders in the futures market
- Bitfinex taxation policy
- Bithumb and UPbit scandal in South Korea
- Institutional investments failed to meet the anticipation of the community
- Regulatory uncertainty in several regions
The massive sell-off of bitcoin by the Mt. Gox trustee and a series of negative events from South Korea and the US, led investors to lose confidence in the cryptocurrency market.
This downward trend would either end up as a healthy correction to shake out “irrational exuberance” and thus attract institutional investors. Or ultimately collapse and go down as the biggest asset bubble in history.
Cryptocurrency to stay or to go?
Yoni Assia, the CEO of major multi-asset trading platform eToro, said based on market data eToro obtained, despite the correction, the demand for Bitcoin has not declined and will not slow down in the near future, as the crypto market continues to grow at exponential pace.
“As the market matures, more investors are expanding their portfolios to include cryptos, while new investors are opening portfolios to trade crypto assets. We do not expect this demand to slow down any time soon, as more people recognize the potential of crypto assets.” -Yoni Assia, CEO of eToro.
Allianz chief economic advisor, Mohamad El-Erian said that cryptocurrencies are not dead, though they may be overvalued.
“As an asset class, it is here to stay… I’m 100% confident a decentralized, non-fiat form of money is here to stay,” -Mohamad El-Erian, Allianz chief economic advisor.
Since Bitcoin’s sharp fall from $20,000 to today’s $6,400, what would the healthy correction price be?
Other notable financial experts have feared bitcoin’s downtrend is far from over and its value could even go lower than $5,000.
Cryptocurrencies will experience a “heavy correction” of 90% leading to a “mass market wipe out,” technology investment bank GP Bullhound predicted in a report.
Founder of London Fintech Week, Luis Carranza, “$4,500 could be the bottom, but nothing is preventing $2,500 from being the bottom.”
Analyst at ETX Capital, Neil Welson said that bitcoin will be derailed soon as soon as regulatory crunch appears closer.
Allianz chief economic advisor, Mohamad El-Erian said Bitcoin a Buy Below $5,000.
Founder and CEO of Digital Currency Group, Barry Silbert said after bitcoin established its bottom in June, the cryptocurrency could not go any lower.
American economist, Nouriel Roubini said that bitcoin would crash to zero.
Warren Buffett told CNBC in January, “In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending.”
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