WHAT HAPPENED? Think back (way back) to a few weeks ago when the bottom dropped out of the cryptocurrency markets. I mean really dropped, with February experiencing a dramatic drop of over 60% in the crypto market valuation. Bitcoin alone sank from almost $20K to under $7K (uh, that’s a lot). So, what did happen? For sure, the whole crypto market was overheated and way too frothy (by the way, EVERY market gets that way from time to time) with hoards of global investors getting caught up in the FOMA (Fear of Missing Out) mania. I mean, come on, over two months to even open a bitcoin account? The buying panic is certainly over, the panic drop has run its course and now all that “fluff” is in the rear view mirror. Remember, BUY low and SELL high. Obviously the opposite took place and……..well, that’s what happened. Next??
(Bill Taylor/Managing Editor)
“Cryptocurrencies set striking records in the year 2017. The values of major cryptocurrencies, especially Bitcoin, Ethereum, and Ripple skyrocketed so high that those who had invested in them earlier felt on top of the world and those who hadn’t felt that they had missed out. On December 17, 2017, the value of Bitcoin had risen to an all-time high ($19,850) as had several other major cryptocurrencies.
Several warnings were given as to why people should avoid investing in cryptocurrencies on the premise of the volatile nature of the market.
However, 2018 has not been a good year for the market so far. Having reached a valuation of $834 billion as of January 7, 2018, CoinMarketCap reported that the market witnessed a drastic plunge of about 66%, losing over $553 billion. Bitcoin recorded a huge loss of over 50% in February, with valuation dropping below $7,000. Ethereum and Ripple also suffered similar drops, both recording losses of over 40% during the same month. This plunge has put many into a state of panic. Could this be where the bubble bursts? Is this what so many experts have warned about? Are we seeing the end of crypto-currencies?
“The market before was clearly overheated,” points out Miko Matsumura, cofounder of Evercoin. “The only fear in the market was fear of missing out.” These speculations led many to rush into the market, resulting in price inflation. However, he believes that the market is currently stabilizing, which was the reason for the plunge.
“I do think there are a number of people in a state of panic, which is unfortunate, but for every new person who panics, there are a number of people who are comfortable with 50% drops and more who are either holding or seeing it as a buying opportunity.” Matsumura believes this could also be a window of opportunity for future gains…”