Introduction
Cryptocurrency prices have been in freefall over the past twelve hours, with some of the largest and most popular digital coins recording double-digit losses over that period. In fact, according to CoinGecko, the total market cap has slumped from $1.07 trillion 12 hours ago to $938 billion at the time of writing, representing an incredible $132 billion loss in value in just twelve hours.
The Cause of the Crash
The crash may have been caused by a sudden surge of sell orders. This is usually the result of some bad news, or when traders are anticipating a change in the market. It can also happen when there’s an influx of new money coming into the market, and there’s not enough time for people to buy everything they want. When this happens, investors might start looking for any reason to sell their positions and get out.
The crash has had a knock-on effect on other markets as well.
The Aftermath of the Crash
The first thing that you have to do is not panic. The natural reaction is to sell and try to recoup your losses, but it’s not a good idea. There’s no telling how the market will react, so it’s best to wait and see what happens before making any rash decisions. If you’re confident that the market will recover, then consider buying some coins at a discount. Otherwise, take comfort in knowing that this was bound to happen eventually — after all, last year we saw a similar crash with Bitcoin losing more than 50% of its value. This is an inevitable part of cryptocurrency trading; just remember that there are always upsides and downsides.
The Future of Crypto
Cryptocurrency is still new, and it’s possible that this is a temporary dip. If you’re looking to invest, consider the following factors before making a decision:
- what are the goals of your investment?
do you have a long-term or short-term time frame for this investment?
what other crypto assets do you currently hold?
what price level would be sustainable for your investment?
how much risk are you willing to take on with your investment?
how does your country’s regulatory climate affect investing in crypto assets?
What type of crypto asset are you considering (e.g., Bitcoin, Ethereum, Litecoin)?
The Binance monopoly keeps growing
Binance is without a doubt the most popular crypto exchange. It has been instrumental in driving up the price of bitcoin, ether, and other cryptocurrencies.
Binance offers many more coins than any of its competitors. This includes coins that are not as popular but are listed on Binance because they do not meet the criteria for listing on other exchanges such as Coinbase and Gemini which focus on liquidity and simplicity.
It also allows for margin trading, which is a way to increase your trading power by borrowing money from the broker so you can buy or sell more tokens with the same amount of money that you would have otherwise had available if you did not use margin trading.
Originally published at read.cash