Bitcoin and cryptocurrencies provide 1,000 ways to lose money
All digital currencies gone down by a considerable percentage
As of 23rd December 2017, according to Coinmarketcap.com there are 1,377 digital currencies circulating in the markets. Out of which 924 are crypto coins and 453 are crypto tokens. These range from Bitcoin with a value of 14,482 USD to Faceblock with a value of 0.000913 USD. On Friday (22nd December 2017) morning, the prices of Bitcoin and cryptocurrencies were down by a considerable percentage. Bitcoin that initiated all crypto-related operations with a solid algorithm for supplying coins, reached the lowest value in the past couple of weeks yesterday.
Some were considering this to be the bursting of the Bitcoin bubble that many still believe is around the corner. However, it is not the case so far. The sell-off was a price correction following the crypto hype in the last few months. The reversal makes cryptocurrencies look slightly less insane and less volatile.
Bitcoin still is 1,200% higher than the beginning of 2017, even after a 35% drop from the record value marked on early December. The price corrections are a common scenario in the cryptocurrency market. Bitcoin fell by 13% within one day three months ago, and by 22% within one day in 2015.
Bitcoin and cryptocurrencies (almost) all are losers
A thing to consider is the connection between basic differences between cryptocurrencies’ merits getting lost in the hard crushing to get rich or get out. Bitcoin falling by 18% within one day also affected the other top 5 digital currencies except Ripple. The values dropped Ethereum by 19.5%, Bitcoin Cash by 28.3% and Litecoin by 20%.
Some of these are altcoins that came out as improved and enhanced versions of Bitcoin. But, with maturity and restrictions these are creating traffic in the system pushing transaction fees above 40 USD.
The swinging of prices creates confusion among the new comers to Bitcoin. Meanwhile, the Bitcoin whales are cutting back. The richest top tier investors of Bitcoin have reduced since January 2017 and the small investor count of Bitcoin has increased.
Even investors with lot of Bitcoin and trying out other cryptocurrencies know the risk of the market turning upside down in an unpredictable manner. We might not see any pressure to rush in Bitcoin trade in the Wall Street even after Bitcoin futures initiated. The exchange funds applications are increasing and there are allegations for money-spinning volatility for cryptocurrencies. So, it is not a surprise of the news of Goldman Sachs Group Inc. initiating a Goldman Sachs trading desk for Bitcoin and cryptocurrencies.
These swaying of prices will let people think twice before investing in cryptocurrencies. This will reduce the need to impose constant regulations and prevent systemic losses. The result will be good for the improvement of digital currencies in the market.