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Opinion: The Reasons Behind The Fall Of Bitcoin And The Factors For Growth

03 January 2019 21:00, UTC
Alena Narinyani

So, the “black year for the crypto market”, which brought us so many disappointments, came to an end. But in fact, the rally of 2018 is not the first Bitcoin rally, in which the coin loses more than half of the value. The only difference is that 2017 was the year of the growing popularity of blockchain and crypto solutions, and our crypto party has grown: new projects, new experts, new investors have joined the community. At the same time, most of the newbies didn’t understand anything in cryptocurrencies and still don’t understand even now — they just wanted to be on the wave of success and profits, but the HYIP suddenly ended. The market went down, and newcomers began to collapse their projects, withdraw investments massively, trying to minimize losses. As the result, ICO and tokens became associated with the scam, and Bitcoin gained a reputation as a dubious asset.

From the end of 2016 to the beginning of 2018, we observed a real bull race in this market. However, now not many people will remember that all this time Bitcoin had both a lot of pessimists and optimists, and their numbers remained equivalent whether the rate is $ 1,800 or  $ 19,000 per coin. When Bitcoin began to decline, each mark was also accompanied by allegations that the best time had come for acquiring Bitcoin at the lowest price, with the consequent skyrocketing to go. Does it make any sense to count on the new bull race in the cryptocurrency market? In fact, despite the decadent sentiments regarding the prospects of the crypto market, there are a number of factors that will provoke the growth and development in 2019.

First, in February of 2019, we expect to see the approval of the first Bitcoin ETF, which will positively affect Bitcoin. Secondly, the popularity of decentralized exchanges rises; they are to become liquid and provide their users with the ability to manage the private keys of the wallet. The banks and the retailers will accept currency as a financial instrument, and that is a factor which will also positively affect the development of the cryptocurrency market.

A new stage of development should be expected after some cryptocurrencies will be considered as securities, which will make them available for retailers and thus create a wide choice of investment tools for everyone. It might even lead to the new wave of “gold rush”. It is assumed that STOs will eventually replace ICOs completely, although these two instruments have different investment mechanisms. ICO is crowdfunding that relies on the community building and social media activity. STO has a completely different audience — it is intended for professional investors.

Despite the fact that STO today is of great interest among the majority of the industry representatives, there are a number of difficulties that make the prospects for its future development somehow blurred. First of all, they concern the legislative details and regulatory requirements of a number of jurisdictions. In addition, much will depend on the regulatory approval of such schemes of investment attraction. Today, the Securities and Exchange Commission (SEC) is leading in the sphere of the digital assets regulation. It is expected that in the coming months the SEC policy on major issues regarding STO will be emulated by most national regulators.

All these factors suggest that in 2019, cryptocurrency trading will remain profitable even if their value continues to decline. There will be some calm on the market and it would allow a number of companies to increase their capital. Investing in Bitcoin and Ethereum will not lose its attractiveness, and altcoin like Ripple, Monero and Bitcoin Cash will remain relevant as well. Also, we expect the emergence and rapid development of new perspective cryptocurrencies. In order to minimize risks, it makes sense to diversify the investments between several currencies.

Image courtesy of Hacked.com

About the author:  Alena Narinyani is a journalist, marketer, SMM specialist and also CEO at Crypto-A.

Disclaimer: the article is for informational purposes only and does not guarantee a return on investment. Readers invest at their own risk. Bitnewstoday authors and editors are not responsible for the readers’ actions.