The bearish trend that cryptocurrency has seen since the beginning of the year after reaching its highest heights ever of almost $20,000 is compared with the dot.com crash in the year 2000.
The Cryptocurrency Crash In 2018
The cryptocurrency bearish trend has seen cryptocurrency market experience 80% loss of value in 2017 alone. A misfortune that makes it similar to Nasdaq Composite Index’s tumble of 78%, which is even more significant as the dot.com crash.
The boom that trailed the internet stock two decades ago before its crash in 2000 saw wide and massive betting on the market, before the eventual crash in 2000. Similarly, wide betting and investment have trailed cryptocurrencies, especially during its high peak towards the end of 2017.
A year after the highest peak of cryptocurrency thus far, it has taken a surprising 80% fall in value. During its peak days, Bitcoin was proclaimed as the digital gold and also proclamation of blockchain technology as the transformative tool for every facet of the society. Though blockchain technology has been living to its expectation, the virtual currencies have suffered a reality check due to excess hyping, security flaws, market manipulation, tight regulation and the slow pace of the institution adoption.
Nasdaq’s recovery to new highs fifteen years later and the unending impact of the internet has shown the turn around that could happen to cryptocurrencies. Notably, Bitcoin had taken a bearish trend beyond its present level and recovered.
However, cryptocurrencies scaling new heights has been attributed to the need of a Bitcoin ETF despite the cryptocurrency market seeing a great shed of over $500 billion in market cap and scrutiny from U.S. authorities. This place the market in greater danger than ever.
The US SEC Scrutiny Of The Cryptocurrency Market
The US authorities fined TokenLot for promoting as a Walmart of initial coin offering and a hedge fund that offers digital asset without appropriate registration. Its owners have agreed to pay more than $500,000 to settle securities and exchange commission.
Cryptocurrency asset management has been accused falsely “first regulated crypto asset fund in the United States.” The firm that raised over $3.6 million over a four-month period of operation was operating illegally. The sole principal, Timothy Enneking, agreed to pay $200,000 without admitting or denying the regulators allegation.
Stephanie Avakian, co-head of the agency’s enforcement division stated that the U.S. Securities law protects the investors by subjecting broker-dealers and other gatekeepers to SEC oversight, including those ICOs and secondary trading in digital tokens.
More allegation of the two is expected against the cryptocurrency market as dozens of investigations are reported to be ongoingly focused on digital currencies. This has placed the cryptocurrency market in more jeopardy.