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Why Does The Crypto Market Keep Going Down?

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Back in Q4 of 2017, the crypto market suddenly received a lot of interest due to several reasons. They gained more exposure, which led to an increase in value, which in turn brought even more exposure. Simultaneously, ICOs became popular as well, and most investors started buying cryptocurrencies such as Bitcoin and Ethereum in order to exchange them for different new tokens.

In other words, Bitcoin and Ethereum themselves were not the coins people wanted to own. Many were actually interested in a number of new coins which could only be obtained via BTC and ETH. However, those who did want to own BTC and ETH — did not want to sell. This created a demand for these two coins, and their value started growing.

Meanwhile, the companies that held ICOs became whales, and they started unloading their coins in December 2017 and January 2018. After the new year started, startups needed to exchange their coins for traditional currencies in order to be able to pay their developers and help their own companies grow further.

The oversale led to the crash of the market, which resulted in a near-total halt of ICOs in 2018. Due to falling prices of crypto, people did not want to invest in new coins, so startups stopped offering them. Those who did offer new coins started accepting fiat currencies for them, and Bitcoin and Ethereum were no longer the only way of obtaining new tokens. As a result, their prices dropped even further,

The market is still dominated by Bitcoin, and this single coin is capable of affecting nearly every other cryptocurrency, including Ethereum. All of their prices go up and down in a perfect correlation. The market should not act this way, but it has no choice due to the lack of regulations and centralization which would keep things in check. However, things are not one-sided as they appear, and as BTC behavior can alter the price of other tokens, the opposite is also true.

The shift in ICO trend

Then, in 2018, something else started happening. Investors started realizing that most ICOs did not have tech experts working on them and that most of these new tokens are not something they wish to invest into. And, while BTC and ETH price increase allowed other coins to grow in value due to extreme price correlation, the drop is affecting the entire market in exactly the same way. In other words, the coins are not as independent as investors would want them to be, and they all grow and drop at the same time.

This is a bad situation even for the established coins, but it is much worse for weak startups that are just starting to appear. However, this can also serve as a filter that will take away weak coins, with only the best ones being able to survive. With less money for random investments, not any ICO can survive anymore, and investors are not willing to gamble by throwing cash at every new ICO as they did in late 2017.

Another thing that has changed is the amount of involvement from institutional investors. While still not ready to go all in, institutions are developing more and more interest in crypto, and they are now believed to be investing more than retail investors. Institutions can also bring a lot more money to the crypto market, but they will not invest in any project. Due to the fact that these are professional investors, they will seek out only the best investments.

While they will want to have their investment portfolios as diversified as possible, they will also aim to have the best risk management. This does not only include tokens but equity as well. All investments will come only after proper research is done, and institutions can ensure that the project is worth investing in. Such way of conducting things will also see a return to traditional market valuation.

As a result, it is expected that startups in 2019 and the following years will be better on average than the ones launched in 2017, which will influence the market’s stability in a positive way. Furthermore, the population of management teams is expected to evolve due to the fact that professional developers are now entering the blockchain industry.

Rooting out bad projects in the crypto market

When it comes to old cryptocurrencies. Bitcoin itself has proved on numerous occasions that it is resilient enough to survive even the harshest conditions. It has already been through numerous surges and crashes, not to mention events such as Mt. Gox hack. In the long term, Bitcoin will likely continue to rise, and after the market gets cleared of weak projects and scams, it will become more robust.

In other words, bad projects will likely run out of money and be forced to shut down due to their coins being worthless, while the crypto itself will survive for long enough to see prosperous times once more. The process can only be completed through weakening the market, which is the situation that is happening right now.

After the correction, a few killer startups are expected to emerge, and these will likely be the one that will lead crypto towards real mass adoption. As a direct result of bringing more crypto users and investors to the market, the value will grow, and surviving coins will likely reach new all-time highs. The token adoption will likely start through a video game sensation, perhaps a crypto-equivalent to Angry Birds. Other projects that will start implementing crypto in new, imaginative ways will appear as well, and the process will continue.

And, as blockchain itself continues to develop and bring decentralization, transparency, and data security into the business world, blockchain adoption itself will follow as well. Considering the vast use cases of the blockchain, and its potential to eliminate scams and data manipulation, this might happen relatively soon, with more and more industries switching to this technology.

All in all, many experts see the current price decline — and the entire year of 2018 — as an experiment with crypto. It had its good sides, such as showing the limits, as well as potentials, of this technology, and also raising awareness of it. After the initial hype dies down, this technology will finally be able to develop properly, with major players joining in.

As a result, the next couple of years, and maybe even decades, are expected to bring prosperity to the economy and business world, but to reach it, it is necessary to first suffer the constant bear attacks and survive massive losses.

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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.

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Blockchain-Focused ETF Arrives on London Stock Exchange

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The crypto community is still waiting for the US SEC to approve Bitcoin ETFs, with speculation which application might get approval being one of the hottest topics in 2018. However, come 2019, the US government shutdown dragged on, and the Bitcoin ETF request which had the most potential to see a grant got withdrawn by the very companies that submitted the application.

While the question of BTC ETF remains hanging in the air, blockchain-focused ETFs seem to be a different matter entirely. In a recent announcement by an independent investment managed firm called Invesco, the company has stated that it was about to launch the largest blockchain-focused ETF in the world. They managed to go through with this plan, and the ETFs have reached the London Stock Exchange today, March 11th.

The exchange-traded fund includes a portfolio containing as many as 48 different firms which are bringing exposure to the emerging technology. Among them, there is Taiwan Semiconductor Manufacturing, which is a well-known creator of chips used for crypto mining, as well as the CME Group, which is the first regulated exchange in the US which launched Bitcoin futures. There are many other well-known companies as well, such as Intel, Microsoft, and others.

Chris Mellor, the Invesco’s head of ETF equity product management in Europe, said that blockchain has a huge potential to increase earnings, even though…

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Could Jeff Bezos Turn to Bitcoin to Hide Fortune from Wife?

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Amazon’s Jeff Bezos has made numerous headlines recently due to his overly-publicized divorce, which shows all signs of being one of the most expensive ones — if not THE most expensive one — in modern history. According to estimates, it might cost him as much as $70 billion, which will make his soon-to-be-ex-wife the richest woman in human history.

However, as the process continues to unfold, many have started wondering if things may have ended up differently for Bezos if he turned to Bitcoin for help.

Bitcoin as a divorce tool?

In the last several years — since Bitcoin and other cryptos hit fame — many have started turning to BTC during their divorce proceedings. In fact, it can even be said that using the largest cryptocurrency in this way has become a new trend. The trend has been gaining so much strength that numerous law companies started including advice on what to do in regards to Bitcoin as part of their websites.

However, while the trend has been picking up in recent years, it is nowhere near as easy as it might seem. For example, if there is even a suspicion of a spouse having undisclosed holdings appears during the divorce process, it might be enough to impact the final decision of the judge. In other words, even if there is a complete lack of evidence, but…

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Three Biggest Things To Know Come Cryptocurrency Tax Season

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In recent years, digital cash systems known as cryptocurrencies such as Bitcoin and Litecoin have exploded into the public eye. A blend of cash and stocks, their use and value has grown exponentially. In 2017, the IRS decided to focus great effort on taxing them. In theory, this should be as simple as calculating taxes on any other type of property, bond, or other assets. Cryptocurrency, however, presents a unique challenge. The full extent of one person’s crypto activity can stretch across dozens of platforms and take a variety of different forms. This makes it difficult to gather all of this information cohesively, much less begin the seemingly- complicated process of reporting it.

These three tips should help anyone looking to legally report their crypto activity to figure out where to start.

Documentation is key!

There are dozens of different “exchanges” individuals can use to change their cash into crypto. When the flat currency is changed into cryptocurrency at the exchange, you establish your cost basis. This makes this data crucial when you begin the process of reporting.  Those who have used a variety of different exchanges should keep detailed records of everywhere that they made trades. Once tax season arrives, most exchanges will allow users to view their entire trading history with that exchange. This information will be necessary later to complete taxes.

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