Cryptocurrencies started perhaps off on the wrong foot in 2018. The first weeks of the month spelt a rather ominous future for the much-ballyhooed crypto assets. First, Bitcoin made a gracious pirouette soaring to $12,000 before it stopped in mid-air and plunged decisively below the $10,000-threshold.
It was not an unexpected event, but one that left many buffs rather disappointed. But Bitcoin was not alone. A string of news has come to pummel the stability of the crypto sector. As headlines proliferated, value was lost.
It is true that cryptocurrencies are now riding their choppy seas. Let us be honest here. A number of experts are already predicting the ultimate downfall of one of the world’s leading assets – Bitcoin. Wall Street predicts it will tank and completely devalue.
If you are familiar with our glossary then you may think pump and dump. Pump and dump, a savvy reader would know, is the practice of hyping over a new asset and investing en masse only to end up in shambles with the value dropping all out of a sudden.
Now, if you ask humorous crypto initiatives such as Dogecoin, there is more pump and hardly any dump. But there are only a handful of assets that can sport quite the success Dogecoin has.
For the rest of mortal cryptocurrencies, the realities are much more chilling and we ought to appreciate them and respect them for what they are.
There has been a lot of hubbub coming from Asian countries, and elsewhere. The ECB has been mulling how to handle the digital era of crypto assets. China has downright banned them. Russia is now flirting with the idea of funding its start-ups through those bits and bytes of gold. However, some see the state and its chums as greedy to bag new quick cash, rather than excelling decently across the board.
Japan and South Korea have both been on the bitter end of aggression and millions have been stolen from both countries and their exchanges. Meanwhile, both South Korea and Japan have managed to put in place useful legislation that would not hurt it. All of this has happened in the past week or so.
The World Economic Forum held in Davos, Switzerland has also seen a number of world leaders discuss cryptocurrencies more open. The truth is that more regulation would be required and this scares markets.
It scares them so much that some major price fluctuations have been spotted throughout the last week.
Bitcoin fell quite markedly in the last week
The dip below the $10,000 –threshold of Bitcoin dragged fellow currencies such as Ripple and Ether down as well. In the case of Ripple, tokens were now worth less than $1 and Ethereum made an ungracious dip below the $900 mark.
NANO and Tether who?
All of the top 15 cryptocurrencies plummeted bar two – Nano and Tether. The results were valid as of 4:05 PM EST. However, Tether has been under a lot of pressure in recent weeks with the US government looking closer into its dealings.
The course of history changes
We hear about cryptocurrencies’ bends and twists every week so perhaps a little too early to panic. We acknowledge that there has been a recent donwsurge in the value of these assets, but nothing all too worrying as of now.
Instead of whipping up fears and indulging in fatalism, we will do well to continue examining the sector. It is time to focus on what really matters and with cryptocurrencies, the long-term is what we should be after.