Bitcoin and the rest of the cryptocurrency Market are Crashing

Bitcoin and the rest of the cryptocurrency market are collapsing – in the middle of the week, quotes of leading digital assets lost up to 30%. The starting point of the global negative trend is probably China, where the government is currently taking tough measures against the use of crypto assets. This creates uncertainty in the market, which, in turn, exacerbates the fall in prices.

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Currently, there is a significant drop in asset quotes, expressed in double digits, for almost all cryptocurrencies. Bitcoin has lost a third of its value in a week, the leaders of the last days of Ethereum and Binance Coin and ICP are also experiencing difficulties. First of all, one question arises: what is the reason for the sharp collapse of crypto assets and how will the market develop? And, as mentioned above: will 2018 be repeated?

The situation of three years ago will not happen again

Florian Wimmer, CEO of Blockpit, is confident that margin requirements cause a chain effect, which then leads to a drop in price. Fees for commissions in the Ethereum ecosystem are insanely high right now – people want to exit the asset.
In any case, the market is overheated now, and the price adjustment is overdue. But Wimmer does not think that 2018 will repeat itself, because now there is too high a degree of acceptance of cryptocurrencies and its market capitalization. There is also a lot of interest from institutional investors. The expert believes that some institutions are now actively stocking BTC.

Fundamentally, nothing has changed in the crypto industry since the last correction

Mathias Raeder from Coinfinity believes that now the industry is starting to change and will no longer depend on Elon Musk. Bitcoin will influence the news agenda, not the other way around. Nothing has changed in the fundamentally positive properties of bitcoin itself. On the contrary, the planned update of the root directory is currently being carried out by more than 90% of miners and therefore is confidently going to be implemented. The expert believes that the HODL strategy and selective purchase is an ideal option.

Local falls often occur in the market

Bit Weber from ONB stated that there is nothing special about strong corrections in the cryptocurrency markets, because there is no stabilization mechanism or a responsible person in the segment who can mitigate the fall. Here, technical security (blockchain, etc.) creates economic uncertainty for users.
Speaking about Musk’s influence on the industry, the expert noted that “a particularly noisy and capricious whale has recently appeared, which at first attracted a lot of small fish, but now it is threatened by waves that it causes with its unpredictable movements.”
More recently, the flagship Diem has also said goodbye to its plans to expand globally. This has undermined the overall level of enthusiasm. Volatility is inherent in the nature of cryptocurrencies – it’s worth putting up with, the expert concludes.

There is nothing wrong with the collapse of the market in the process of becoming an industry

Expert Robbie Schwertner, known in the crypto community as Cryptorobby, believes that cryptocurrencies may have two or three difficult years ahead. Elon Musk turned away from bitcoin, which alarmed many investors. It is noteworthy that the founder of an electric car company rejects a digital-based currency system. The news that China plans to completely ban cryptocurrency trading also contributed to the fact that bitcoin was under pressure.
According to Schwertner, the collapse is a beneficial correction of the cryptocurrency market. Uncertain market participants lose their composure and leave. Innovations, decentralized financing, industrial applications based on blockchains and blockchain technology for social projects may again be in the spotlight.

“Blockchain technology has arrived, and cryptocurrencies are part of it. And the old stock exchange rule says: if everyone is in a panic, buy!”, – concludes the specialist.

Published: 15 March, 2021

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