I have quite a bit (for me, but chump change for many people here) of money invested in a spectrum of cryptos. When I woke up yesterday and saw the value of my investments had lost about $4000 in value yesterday I had a WTF moment, but I didn't panic. Why didn't I panic? These things happen frequently.
Also in looking across the cryptos I realized it wasn't that I made bad investment picks for the cryptos I have funds in. It was in fact a huge dip across ALL cryptos that I looked at. The exception being Tether which is simply a US Dollar Tether. It jumped up as a lot of people likely temporarily stored their cryptos there.
Still, I found myself wanting to know what caused this dip. So I looked around. Then I found out there has been a nearly identical dip the last 4 years. It has happened mid-January every year. It has then rallied not long after that. The only thing I can think of for around that time is tax season. This may not be the case, but the dip itself seems like an annual pattern that happens. I wish I had been aware of this pattern before hand. I would have sold all my crypto at the beginning of January and then bought back in at a low spot in the expected dip. Next year!
It has fallen further today but not as rapidly. It has popped up a bit here and there.
The key of what is happening is that last week I saw a point when Cryptos had a combined $750 Billion Market Cap. I just now looked at coinmarketcap.com again and the current market cap is listed as $489 Billion. This is a large chunk of money pulled out of cryptos across the board.
This is not the only factor. A banker decided to come out and state that governments could ban cryptos. How are they going to do that? If they could do that it would have happened to Bitcoin years ago. If they are centralized like Ripple they might be able to stop it. If they are decentralized they can't do much about it. This is why so many of us make a big deal about decentralization. Decentralization is the key to stopping censorship. Censorship is just a form of banning. It doesn't work on decentralized systems unless you can simultaneously and quickly take out enough nodes to damage that network.
For example this is why Steem runs on the witnesses. The top 19 witnesses are the storage around the world for the steem blockchain. There are far more than 19 witnesses though. There are plenty of nodes not in the top 19 that are available and ready to jump in take over duties if one of the 19 go down.
If enough nodes are running on a place like Amazon Cloud (AWS) then potentially those nodes could all be taken out at once, but then nodes that are all over the place and not on Amazon or some other corporate cloud will spring into action.
Other cryptos that are decentralized have a similar setup.
I have a positive outlook that we will see a rally. If I had more money available I'd be buying more crypto while it is low.