If you are an investor who has invested in cryptocurrencies in the past, you are probably wondering what will happen to your investment in the future due to a big Bitcoin fall.
Bitcoin is a cryptocurrency, a form of digital currency transfer or exchange that uses peer-to-peer technology, without the use of any intermediaries, no central authority or banks.
The management of bitcoin is carried out by the network. The advantage of using bitcoin is that it has global payments, low processing fees, and swift peer-to-peer transactions. It is also open to the public. Therefore, nobody owns or controls Bitcoin, everyone has a collective responsibility to take part.
Bitcoin dominance is on the rise after a terrible month, when its prices fell when its cash was to be divided, the investors and developers failed to have an agreement over its future, leading to cryptocurrency sell-off. Bitcoin analysis reveals that even if their prices have dropped to seven percent, the crypto market is trying its best to make sure that Bitcoin survives.
Bitcoin and other cryptocurrencies are losing since it dropped its price. The reason for prompt price losses is, that some analysts say, due to panic selling. The latest news about Bitcoin is that the large holders of cryptocurrency, known as the whales, are not responsible for its low prices.
There is another reason why Bitcoin lost its value.
The new digital currency is created through a process called Initial Coin Offering (ICO).
People usually buy cryptocurrencies thru the ICO because cryptocurrencies are cheap and can bring large returns in the future. But ICO’s are now faced with much greater control by regulators. The fact is that most of the ICOs raise funds through cryptocurrencies. A drastic fall in market prices of digital currency come to the situation that these ICO’s owed investors more money in USD than they currently have. In short, the ICO’s may not have the money to return to investors, due to retention property in cryptocurrency which has dropped the price.
These ICO’s might be forced to file for bankruptcy, which brings us to the fund managers.
For a long time, there were rumors about a ruptured balloon of digital currency. All are anxiously watching what happens with Bitcoin and said it would certainly come to a sharp fall in its value. Thus, the analysts were right, because Bitcoin quickly fell to low values. But the trouble in the cryptocurrency market could continue for some time. A drastic fall in prices of digital currency affects companies in the blockchain and crypto industry. This also applies to the hedge funds. Due to the large Bitcoin fall, those funds might soon start to close. Simple – the managers of the funds paid commissions based on their success in the past period, and the current bear market that lasts for more than ten months has led many funds to the brink of existence. Many managers could close the funds and return money to the investors. But why these funds have not yet been closed? The answer is because of the inexperience of young managers who do not realize the problem until they get their fee for 2018.
The changes in Bitcoin prices have made other dominant digital currencies to be affected, some of those affected by its dropping value every day, including Litecoin, Ethereum, Stellar, EOS, and Ripple. Coindesk data reveals that Bitcoin’s sharp changes in its prices have wiped out so many dollars from its market capitalization.
The unbelievable prices may also be caused by either the trading bots which are promising business with Bitcoin but on the way they are porched by others creating a fluctuating effect on the prices. It automatically generates the market rate value an asset to experience a drop in exchange operations.
Many people are wondering why bitcoin has dropped its value that fast. It is due to Bitcoin confusion on the coin base where they want to utilize their digital cash for them to re-evaluate.
Market manipulation has also affected Bitcoin since most of the investor’s posses are around forty percent. People ensure that they resell off the masses of bitcoin stock. Also, the regulations have scared away many of the investors and make the existing participants experience losses.
Analysts also believe that these changes soon could stop and that the situation after the new year could normalize. But this situation once again showed that the whole system of cryptocurrency is very fragile and uncertain. And that there is a legitimate fear of investors in the digital currency. Those who bought Bitcoin in recent weeks, now surely regret it. The only thing they can do is wait for better days for the cryptocurrency.