Bitcoin is dead and outsiders in the bearish marketDec 17, 2018
At the end of the previous week, the most discussed news was the statement of Erik Finman, one of the youngest millionaires, who said that Bitcoin is already dead. Eric earned his first $100 000 by investing 1000 dollars in Bitcoin back in 2012 and selling it in January 2014. Finnman admits that BTC can still carry out one or two ascending rallies, but in the long term timeframes, it is dead. He is even more pessimistic about the situation with Litecoin, which died some time ago, according to his opinion.
It’s important to note, that over the last 4-5 weeks, capitalization of cryptocurrencies has decreased by more than 50%, approaching the level of $100 billion. All this indicates that Erik Finman and some other experts may be right. Last week Bitcoin Cash (BCH) and Stellar (USDT) lost 25.2% and 20.5% respectively and became outsiders among the cryptocurrencies with capitalization over $1 billion. At the same time, Litecoin (LTC) rose by 6.8%, updating its two-week maximums during the first half of Monday.
Bearish fundamental factors for the market
The study conducted by Blockchain Transparency Institute (BTI), shows that only two of the 25 largest crypto exchanges do not overestimate trading volumes. According to the data published in the BTI report, only Binance and Bitfinex do not overestimate trading volumes, and they coincide entirely with CoinMarketCap (CMC) indicators. This information is harmful to the cryptocurrency market, but it is hard to call it startling because such information has appeared more than once. However, the fact that the absolute majority of crypto exchanges distort information about volumes puts pressure on cryptocurrencies, reducing trust in this market.
The tightening of the cryptocurrency market rules persists as another fundamental bearish factor, along with rejection of the request to create Bitcoin-ETF.
For instance, the Basis startup decides to return $133 million to investors due to the negative requirements put forward by the securities market regulator.
Optimistic point of view on the cryptocurrency market!
Regulators, first of all, are trying not to complicate operations with cryptocurrencies and blockchain technology, but just protect the investors. Jay Clayton, the US Securities and Exchange Commission (SEC) representative, noted the advantages of ICO for raising funds. Clayton also emphasized that the SEC team took considerable time studying blockchain and cryptocurrency assets.
Therefore, in 2019 the development of these areas will continue. Worth noting that development of investment tools for cryptocurrencies’ may significantly speed up the approval of Bitcoin-ETF by the SEC. Swiss analog of Bitcoin-ETF, which is traded on the Swiss Six exchange brake through the new record for demand, even as declining in the BTC price.
However, the majority of investors and traders expect a further decline of main cryptocurrencies in the short-term period, and only in the second quarter of 2019, they may resume growth. By this particular period, SEC may approve the launch of Bitcoin-ETF.