As of today, the world’s largest and most well-known cryptocurrency, ‘Bitcoin’ is now currently going through a steep decline. From the December 2017 peak of approximately $335 billion to all the way down to $190 billion mark, this is an extremely sharp crash to say the least. While many market pundits attribute it to ‘market correction’, many others are convinced that the era of wild speculation is now drawing to a close and sanity is returning to the digital currency market, as a whole.
As a matter of fact, Bitcoin seemed to be the premier digital currency of choice for pretty much the whole world as it grew exponentially in December 2017 from being less than $3,000 all the way to nearly $20,000 in a matter of few months alone.
However, the advent of 2018 pretty much pulled the plug on the whole deal and indeed the entire digital currency market as a whole has been struggling to maintain its previous momentum. It was not just Bitcoin alone that took a hit, but also its closest rivals such as Ethereum as well as Ripple.
But here, the question is what precisely happened that triggered this avalanche? Well, the answer is pretty simple: market speculation. Many of the smaller players were concerned that the prices in the world of digital currencies in general, had been artificially raised by few of the larger players of the game and they will divest their stock of cryptocurrencies, once they had made their coveted windfall.
Once this rumor set in, panic selling quickly ensured in much the same way it does in the stock exchanges of the real world and people wanted ‘out’ as soon as possible, before they felt that they would quickly lose all of their life’s savings.
Tethercrypto currency was deemed to be the culprit here. This comparatively newer and lesser known digital currency had been accused of being artificially raised by its owner Bitfinexin by way of a bid to boost value over and above its actual market price.
This suggestion had initially been made by a few financial bloggers, whose articles were shared so aggressively by the mainstream market that they went viral, and so, the already jittery public quickly decided to liquidate their investments.
However, rumor mills were not the only reason why digital currencies were experiencing a downswing. The very real threats came from powerful hackers (sometimes backed by national governments) as well as the seemingly endless number of threats from different countries that led a crackdown against both trading and mining operations (with the People’s Republic of China leading the charge), and the increasing fear that soon such currencies will be as comprehensively regulated as their real-world counterparts, making the investors lose their confidence.
Many digital currency exchanges were unceremoniously hacked and investors savings were wiped out to the tune of literally hundreds of millions of dollars within seconds.
All of these reasons in tandem with each other have succeeded in leading to a lower demand for such currencies at this point in time, thereby leading to a decrease in prices almost all across the board.