Cryptocurrency has reached an all-time high in value recently, but now we’re seeing it plummet to new lows, leaving people wondering why this might be happening and what this could mean for the future of cryptocurrency.
The market cap of crypto
According to CoinMarketCap, there are currently more than 1,900 cryptocurrencies on the market. The combined market cap of all these digital currencies has been steadily increasing since 2009 when bitcoin was introduced. During 2017, however, it skyrocketed from $18 billion to nearly $600 billion. After reaching its peak in January 2018 ($800 billion), it quickly dropped down and has been fluctuating for months. Currently, crypto’s market cap hovers around $250 billion. (1) With such a large investment at stake—and after spending 10-plus years watching crypto goes through massive ups and downs—you might be wondering: why is cryptocurrency crashing now?
Reasons why the price went down
it all started when China banned ICOs. The ban triggered panic selling among investors (and speculators) who dumped their holdings in favor of other cryptocurrencies, or, more likely, fiat currency. China’s crackdown has caused a domino effect across global cryptocurrency markets; Bitcoin has lost 25% of its value since yesterday, while ethereum crashed from $300 to below $200 today. While you could say that cryptocurrency had it coming after an unprecedented bull run during which almost every crypto-asset reached all-time highs — it looks like it’ll take some time before everyone regains their appetite for risk.
Things to consider when investing in crypto
When evaluating whether a cryptocurrency will be successful or not, it’s important to consider two things: how big of a problem is it solving? And how big of an audience do they have? If you don’t buy into what they’re selling, why would anyone else? To clarify—it isn’t enough to find an opportunity that might be large; it must be an actual, real need that people are willing to pay for.
Is it too late to invest in cryptocurrency?
It’s true that investing in cryptocurrency comes with many risks. However, no one can predict what will happen to any given currency. Because of these wild fluctuations, investors are flocking to assets like gold, which has stood as a reliable store of value for thousands of years. The truth is that you probably shouldn’t invest heavily in any cryptocurrency unless you’re prepared to lose every cent you spend. That said, there’s always a chance crypto price could go through another period of volatility and recover before long—in which case it might not be too late to invest.
How to protect yourself as an investor
Cryptocurrencies are notoriously volatile, meaning their prices can fluctuate wildly. This increases your chances of losing money when you invest, but it also means it’s possible to make huge gains in a short amount of time. Unfortunately, there are few concrete ways to protect yourself from losing your money if you invest in crypto; exchanges don’t have any obligation to provide support or reimburse customers for losses incurred because of technical problems or hacks. Still, there are some things you can do—like only investing what you can afford to lose—that will make sure you have fewer regrets about your decisions.
How crypto market crash
It all started with the regulation in China. Chinese authorities ordered three of its biggest cryptocurrency exchanges—BTCC, Huobi, and OKCoin—to cease trading services in September 2017. As a result, crypto-related activity in China dropped dramatically. And since then, Korea has banned ICOs, while Japan has cracked down on all crypto activity by bringing more oversight to exchanges there. This left fewer markets for digital coins to be traded into fiat currencies like US dollars or Japanese yen — creating selling pressure that finally burst the bubble . . . even though I think we’ll see another surge again soon enough. However, one thing’s clear: it doesn’t seem wise to invest money you can’t afford to lose into cryptocurrencies at least for now.
Can crypto crash to zero
The short answer to whether cryptocurrencies could actually go to zero is, yes, it’s a possibility. How likely that scenario might be depending on what crash means. It’s unlikely that any cryptocurrency will ever fall all the way to zero, but there are certain situations where that might happen. When we talk about crypto going to zero, we usually mean a broad collapse in values across multiple coins or tokens. However, things can get even more extreme than that. In fact, there’s a chance some cryptocurrencies might actually become worthless through bankruptcy. That doesn’t mean they stop functioning as currencies; rather they cease to exist entirely because no one in their right mind would want them anymore after losing 95% of their value.
What caused the crypto crash today
Bitcoin, Ethereum, Ripple: It’s been a brutal few days for cryptocurrency investors. After weeks of gains across most major cryptocurrencies, digital coins have fallen sharply on Friday. And in some cases, digital tokens are down by double-digit percentages. As of 10:30 a.m. ET on Friday morning, bitcoin had plunged about 20% to $10,982 (the last time it was trading at that level was November 2017). Ether has plunged 21% to $817 from its record high of $1,417 set just four days ago while XRP has tumbled more than 24%.
Why crypto crash today
If you’re wondering why cryptos have been crashing recently, look no further than Facebook. Mark Zuckerberg has denied that he wants to destroy cryptocurrency; it’s a good thing too because it looks like he already has. The tech giant announced yesterday that it would ban all crypto-related advertising—that means no ads for ICOs, wallets, or trading advice will be allowed on its website. This policy change isn’t surprising given Facebook’s previous attempts to kill cryptocurrency; it has banned crypto-wallet apps in the past and Zuckerberg once called cryptocurrencies dangerous. Still, it could have a significant impact on digital currency prices.
Why crypto crash now
There are two sides to every coin. But even coins, like Bitcoin, can crash. The same reason why people are so excited about cryptocurrencies such as Bitcoin could be what causes it to crash now and in 2017. And that reason has to do with how Bitcoins are created; that is by a process called mining. The total number of Bitcoins that will ever be created stands at 21 million units of currency. 17 million have already been mined while 4 million more will be mined through 2040.
Why crypto crash today in India
According to various sources, India has banned cryptocurrencies in a countrywide crackdown. This directly affects cryptocurrency-to-cryptocurrency trading, but even the cryptocurrency exchanges have been hit by regulators. The Reserve Bank of India (RBI) clarified that it had not licensed any companies to operate with cryptocurrencies. So that means no new crypto exchanges can be opened, nor can existing ones continue operations. The regulator further said that those who continue to operate could face penalties and risk jail time, according to local news outlets. This will certainly cause chaos in a country with one of the biggest youth populations anywhere in the world where many are attracted to cryptocurrencies as an investment opportunity.
Why crypto crash 2022
Price fluctuations in crypto are more extreme than other markets, in part because of how sensitive cryptocurrencies are to news from regulators. That said, it’s also possible that we’re simply seeing price corrections after rapid growth; for example, Bitcoin fell 50% between mid-November 2017 and early January 2018 before rallying a few weeks later. The question for investors: Is now really a good time to dive into a volatile cryptocurrency market? While no one can predict when it will recover (if ever), there are several factors that suggest if you take some time to understand why it’s crashing now, you can be better prepared to seize opportunities down the road—including potentially lucrative buys when prices dip again.
Will crypto crash further
Yes, it’s highly likely. At its peak in January 2018, Bitcoin was trading at $19,783. That might sound like a lot to some readers but it’s actually a massive correction from its all-time high of over $20,000. Other cryptocurrencies have even bigger corrections—like Ethereum. From its high of over $1,300 in December 2017 to $255 by February 2018 (at the time of writing), a drop of more than 85 percent. So yes—there’s a strong chance that we haven’t hit rock bottom yet for cryptocurrencies and there will be more bloodletting before things start looking up again for digital currencies—but what can investors expect?