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Who Crashed The Crypto Market And How To Save Assets

22 November 2018 19:33, UTC
Daniil Danchenko

The drawdowns and financial bubbles inflating are a common situation on the cryptocurrency market, which usually has cause-and-effect relationships. But not this time: after a few weeks of peace and quiet bitcoin just dramatically flew down. For no particular reason. But on the other hand, if the reasons are not visible, it does not mean that they don't exist.

Just recently, crypto market players have believed in the illusion that the world is on the verge of adopting a digital economy. But the bitcoin rate that crashed pulling the entire market, quickly brought it back to reality. Cryptocurrency ecosystem participants actively began to look for reasons of this situation, finding a lot of them: from intentional market manipulation, bitcoin whales gameplays and bankers conspiracy to players collusion with the aim of cleaning up the crypto market from its unscrupulous participants. But if we discard the numerous conspiracy theories, there are no so many reasons for real ones.

The first and underlying reason: market was influenced by the actively created regulatory framework. Now the American SEC has demonstrated that it is ready to check any project, if the Commission has only a shadow of doubt in its honesty and clearance. And this is not an isolated, purely American precedent, the European regulators show the examples of similar actions. If omit the details, cryptocurrencies become the branch of the industry, which is strictly subjected to the rules of the game in the big money market. And despite this, changes in legislation couldn’t play a global role in the current market crash. Certainly such news would possibly lead to a massive drain of assets a couple of years ago. But now the situation is quite different: both positive and negative, such news have no longer a significant impact on the price movement.

The second and much more weighty factor is the Bitcoin Cash hardfork. Due to the existing disagreements in the network, in order to support one or another part of the cryptocurrency split, investors began to sell their free crypto assets in order to obtain open liquidity. However, this was not a decisive factor, because in general BCH is quite secondary to BTC.

So what is the real reason that would fit into the picture, which has been systematically formed by 2018? The only real explanation is a massive collusion in the market.

According to the managing partner in the law firm, a member of the Moscow Guild of lawyers Maria AGRANOVSKAYA, someone buys cryptocurrency at reduced price in that way. “There is a large number of points of view on this topic, but one thing is obvious - there is no reason for such a serious fall today. Who benefits it? Big players may make good money on this.”

A similar opinion is shared by the COO of company that develops the neural network software for trading Alexander ALESHIN. But he has a fairly clear assumption about the potential customers: “This bitcoin falldown is a completely technologically calculated action based on speculation of large capital. Under suspicion in the first place there are the large mining companies with an impressive amount of money. Firstly they could collapse the market to strengthen their presence using such background and then deal with their competitors”.

Thus quite a clear picture begins to emerge: now small and medium-sized mining companies go bankrupt, while for the industry giants of such a level as Bitmain or Bitfury have completely insignificant financial losses.

But now, for most investors, the issue of preserving their funds is the main one. What do you need to do for protecting or even increasing your assets? First of all, don’t panic. The FUD on the modern cryptocurrency market is becoming more and more dangerous phenomenon: the stakes are growing with incredible speed. Therefore, it is important to minimize communication even with potential scammers. Legislators have tightly taken up the regulation of the DLT industry, and now there are many options to protect themselves: first of all, it is best to deal with licensed companies that are able to provide custodial storage and bear legal responsibility for their actions. Secondly, it is necessary to avoid any contact with companies operating in the gray zone.

But the main thing is to understand that bitcoin is not about primarily stock games or market speculations. This is a story about technology and innovation environment created inside the cryptocurrency ecosystem. And all the arguments about the price of bitcoin and its price phenomenon are nothing more than a gamble at the junction of fiat and cryptocurrency. And this effect is not much different from sports betting or roulette. According to the crypto economist Yevgeny ROMANENKO, "Bitcoin doesn’t care whether it falls or not, the main thing is that its “heart” beats, performing the mathematical functions, which means that everything is fine with it. And those who primarily pay attention to the price value and don’t seek for anything but that - they are just amateurs who hit the market by accident.”