Cryptocurrencies set striking records in the year 2017. The worth of major cryptocurrencies, especially Bitcoin, Ethereum, along with Ripple skyrocketed so high that those who had spent in them felt on top of the world and those who had not felt that they had missed out. About December 17, 2017, that the value of Bitcoin had climbed to an all-time large ($19,850) as had several other important cryptocurrencies.
Several warnings were given as to the reason why individuals should avoid investing in cryptocurrencies on the premise of their volatile temperament of the market.
However, 2018 has not been a fantastic year for the market up to now. Having attained a valuation of $834 billion at January 7, 2018, CoinMarketCap reported the market observed a drastic plunge of about 66 percent, dropping more than 553 billion. Bitcoin recorded a massive reduction of over 50 percent in February, together with valuation dropping below $7,000. Ethereum and Ripple also endured comparable drops, both documenting losses of 40% during the same month. This dip has put many into a state of fear. Is this where the bubble pops? Is this exactly what so many experts have warned about? Are we seeing the end of crypto-currencies?
"The market before was obviously overheated," points out Miko Matsumura, cofounder of Evercoin. "The only anxiety in the marketplace has been fear of missing out." All these speculations led several to rush into the current market, resulting in price inflation. But he thinks that the market is currently stabilizing, which has been the reason for the dip.
"I do think there are a variety of people in a state of fear, which can be unfortunate, however for every new person who panics, there are a number of individuals who are familiar with 50% drops and more who are either seeing or holding it as a buying opportunity." Matsumura believes this could likewise be a window of chance for future gains.
There is, hence, a requirement for good regulation of this market. According to Thomas Glucksman of Gatecoin, "Increasing regulatory understanding of cryptocurrency markets, the coming of institutional funding and significant technology improvements will give rise to the market's rebound and push cryptocurrency costs to new highs this season."
Based on Dager Contreras, co-founder of Ocular, developments like blockchain security and compliance enables investors to truly feel safe when investing in cryptocurrencies.
"As exchanges and pockets continue to boost their security measures, including stronger KYC (know your clients) and AML (anti-money laundering) systems," he clarified, "investors may feel safer knowing that the likelihood of being hacked is decreased."
When asked for his thoughts concerning regulation, Matsumura stated that "of course there is more regulation coming, but the approach so far hasn't been the introduction of new laws, the approach was taking enforcement actions against fraudsters and individuals who unintentionally broke securities legislation."
"Obviously another huge issue is hacking, divorce and security," Matsumura points out. "The use of huge centralized custodial exchanges is a horrible weakness in an otherwise real estate economy. We will experience gigantic hacks before the community realizes that they will need to shift to noncustodial markets"
With the recent hack Coincheck costing the company $530 million in digital money, the anxiety of security can't be over-emphasized. The hack is thought to be one of the greatest in background and sparked raids by the Financial Services Agency in Japan on the market. The heist has heightened the need for appropriate regulatory and security measures in the market.
Negative press round cryptocurrencies has done little to relieve tensions on the industry. Back in December, The Crypto Company has been suspended from the U.S. Securities and Exchange Commission amid worries regarding the adequacy and accuracy of information about the Business. Speculation about cryptocurrencies being a bubble which could burst at any time has also led to a rise in fear among several.
In February 2018 the Bank of Austria reduced the value of Bitcoin to "pure speculation." Such hard-hitting statements from various sources delivered cryptocurrency investors -- especially the new ones -- into a frenzy, which is thought to have led to the recession.
In addition, Chinese governments have recently banned ICOsfrom the nation and will prevent citizens from accessing sites that offer ICOs. The country's central bank has hinted it's going to tighten regulations about the participation in overseas ICOs and cryptocurrency trades.
There is reason for economy optimism. Bitcoin is currently standing in a bit over $11,300. At February 12 the cryptocurrency market had experienced a surge to $429.5 billion. Bitcoin is now rising from its initial standing that was under $6,800, likewise, Ethereum and Ripple have both increased in value more than 20%. James Burk of Outlier Ventures considers that in another month "that the marketplace will likely go to some Bull Run comparative if much greater than last year potentially reaching the trillion-dollar markers prior to a proper crypto winter sets in where the market becomes more focused on proper market fundamentals."