They have based it on Metcalfe’s law which says at this point that Bitcoin could lose another 27%. The group also cites the part I agree with, in that so far cryptocurrency prices are mainly driven by Bitcoin which means Altcoins (other than Bitcoin) have risen and fallen in direct correlation.
Where I am not sure if I agree or disagree is their theory that a lot of this is driven by fear in the news. While I am sure it is, if the fear is unfounded why should bad news reflect on the long-term valuation?
A sensible market would be wise to react to say the hacks that have happened to Ethereum or the fact that illegal content has been inserted into the Bitcoin Blockchain. That is bad news that has relevance since these issues potentially threaten the integrity of the entire blockchain.
While we’re on the topic of Metcalfe’s law, since cryptocurrency is a completely new and largely irrational market can we trust this is a valid predictor? I am not aware that any other traditional models have successfully called any of the major events in cryptocurrency.
I do agree it was time for a significant correction but the same has happened in commodities and stocks before, yet the stock markets keep moving (albeit with a lot of money printing and manipulation-is that what regulators mean by regulation for cryptocurrency? ).
Only time will tell where things head but I do think that currencies that are efficient, secure and easy to use will stand the test of time (which admittedly are very few and I cannot think of a single one that solves all of the issues just yet).
There is no doubt 2018 has been an incredibly tumultuous start for cryptocurrency. But I’ll say it again, there are still huge gains for the majority of people unless they bought at the end of 2017. There are still valid reasons to be both bearish and bullish, depending on which segment of cryptocurrency you are talking about.
I think first we should think what is really driving down the pricing? People were buying in like crazy and prices were going sky high for both Bitcoin and Altcoins. I’ve always had reservations about particular currencies and ICOs but the majority did not.
My belief is that there is a concerted world-wide effort by government and finance moguls to dethrone cryptocurrency. Governments hate it because it threatens the entire central banking system, and bankers hate it for the same reason. Yes there are some issues with ICOs but there are also stock market scams to this very day. Fiat is also used illegally and counterfeited all the time and it never got banned.
So with that, I propose that statements from governments and banks are akin to all out war on cryptocurrency. In 2018 we are seeing that plan move into action as they panicked as they saw the market cap grow exponentially in 2017.
However, much like Gold or Silver, it can only be kept down for so long. You can push them down under the water but they come floating and rushing back to the top. I think that is what will happen with cryptocurrency in the near-time.
Now don’t get me wrong, there are real issues and risks and I’ve talked about those endlessly. The winners will be the ones who embrace change and understand the basics of business and IT security have been breached with most cryptocurrencies and ICOs. The ones who solve these problems and the ones who invest in the solutions will be the long-term winners. I dare say any project and investor who doesn’t take part in the solution may be on the dot-bomb side (an era which I feel many have never known or forgotten).
There is a lot of FUD but is artificially manipulated and perpetuated in the media and also directly with attacks on the price through large whale investors/hedgefund managers selling and controlling the price of cryptocurrency.
I am bullish on crypto still because there are a lot of astute and average investors who have not jumped in. Eventually they will jump in, and the moment they do is when cryptocurrency will enter a stratospheric increase in market cap. I also feel the ones who wait will be more diligent and disciplined investors (the kind who didn’t panic during 2008).
Time will tell but my call is for the bulls!