The stability of Bitcoin’s rate and other cryptocurrencies is a big question. At the moment , everything that cryptocurrency does stably is rushing through the Hell into suspense.
Infernal flight started on November,14 at 11:34 UTC. At that time, BTC rate was around $6 365, and ETH was $206, according to CoinMarketCap.
At the time of writing this article, November, 20 at 11:00 UTC, the same resource updated the data to an even more disastrous rate: the cost of one BTC is $4 459, and ETH $132.
At the same time, the Coin 360 monitoring resource shows a BTC rate of $4 460, and an ETH $131.
Apparently, the collapse of the coin rate is not going to stop, and this is clearly indicates, that a fateful event happened in the crypto industry, which collapsed the market.
Due to specifics of cryptocurrency, it is impossible to determine now what exactly the main cause of the falling prices. However, The Coin Shark conducted its own, independent investigation and identified three most logical versions of why crypto “tends to zero”.
So, the reasons for the collapse of the market can be:
1.The split of Bitcoin Cash into BCH SV and BCH ABC;
2.The refusal of the China authorities to provide the miners with the cheapest electric power;
3.The theft of 600 BTC from the Bitmain company.
Now, let’s consider each reason in a more detailed way.
1. The split of Bitcoin Cash hard fork
It is possible, that the sudden collapse of the market is a consequence of the Bitcoin Cash hard forks. History has proved once again, that serious network updates provoke the panic within the crypto community. Especially among investors, who fitfully begin to sell their coins. Panic attacks are not so unprecedented, but rather very thoughtful. If during the fork there is a malfunction, it is guaranteed to have an impact on the future of the crypto market.
Presumably, the cause of today’s “successes” of cryptocurrency is a backdoor, that hackers manage to discover and made a hashrate diversion from BTC.
We want to remind you, that now Bitcoin Cash is divided into Bitcoin ABC and Bitcoin SV.
In this regard, Australian programmer Craig Wright wrote on his Twitter:
To all BTC miners…
If you switch to mine BCH, we may need to fund this with BTC, if we do, we sell for USD and, well… we think BTC market has no room… it tanks.
Think about it. We will sell A Lot!
And, have a nice day
(BTC to 1000 does not phase me) pic.twitter.com/oUScEahtWc
— Dr Craig S Wright (@ProfFaustus) November 14, 2018
The founder and CEO of BKCM, Brian Kelly, also considers that Bitcoin Cash is involved into collapse of BTC rate and and other cryptocurrencies. He shared this during an interview at CNBC Fast Money.
— CNBC's Fast Money (@CNBCFastMoney) November 14, 2018
Most likely, this pseudo-war between BCH SV and BCH ABC in the nearest future will cause a decrease of hashrate in BTC, which in its turn, will reduce the network speed.
“People are concerned that both Bitcoin and Bitcoin Cash markets, their networks might slow down, they might not work as well, the software upgrade may not go through or if it does go through, we will end up with some chaos. People started selling, that triggered stops, everybody got concerned. The entire market settled down. In my view, a very short-term event”, – explained Kelly.
2. Insufficient speed of Bitcoin network
The authorities of provinces of Xinjiang and Guizhou stopped to provide the Chinese miners with cheap electricity. Now, the miners are forced to look for an alternative method of mining Bitcoin and other cryptocurrencies.
Because of this, main mining facility, located in China, suspend their activities in order to find an alternative resource for mining cryptocurrency. This caused the decrease of Bitcoin hashrate network by almost 20%.
3. Theft of 600 Bitcoins
A major Chinese company, Bitmain, has announced that its account has been hacked at Binance crypto exchange. At the time of the hack, more that 600 BTC were stolen – which is about 2.7 million dollars at the time of writing this article. The hacker has not been found yet, but it is known that he tried to increase the speed of a little-known cryptocurrency MANA with the help of this money.
This kind of news has already changed the mood of the market, while reducing the rate. It’s likely, that this particular incident could undermine Bitcoin and other digital coins.
Why none of the positive forecast did not come true?
It is impossible to predict the cryptocurrency rate in advance, as it can be done on the usual market for fiat. On the crypto market, we see the outcome and only than the reason. For example, the dollar increases after raising discount rate in the USA, but the cryptocurrency doesn’t. Since, its rate doesn’t depend on the ordinary economy and on decisions of the authorities.
The cryptocurrency rate is not backed up by anything. It depends only on supply and demand. Therefore, it is impossible to predict the behaviour of the rate in advance. For instance, exactly one year ago, on November 20, 2017, the Bitcoin rate was $8 039.
After just one month, the rate set the first historical record – $19 440.
Based on the last year’s situation on the crypto market, it cannot be stated, that this year it is going to be the same. This market is sensitive and unpredictable.
In relation to the worsening situations, all cryptocurrency holders are worried about – “What to do next?” – that’s a good question. But unless the true reason of the collapse of the rate is revealed, there will be no exact answer. As for now we can only guess how the events will unwrap.
For example, a financial analyst, Alexey Polovinkin, in an interview with OBOZREVATEL, shared the view, that the rate of the world’s most massive cryptocurrency by capitalization will increase by $40 000 for one coin. The expert explained, that Bitcoin will grow due to the possible legalisation of cryptocurrencies, which will have an effect on institutions and investment companies. According to Alexey’s point of view, they will start considering the entering of cryptocurrencies in the marker in a large amount. We want to remind you, that Polovinkin predicted the growth of Bitcoin in 2017.
Also, a venture investor Tim Draper is trying to make a good forecast, reports The Daily Hodl. The investor is confident that in the 2022 the price of Bitcoin will rise to $250 thousand. While, an investment banker and millionaire Mike Novogratz, makes more modest forecasts, stating that the rate will reach only $10 thousand.
Not all sharks of the crypto world are optimistic about the future of the market. In this regards, CEO of the BitMEX exchange, Arthur Hayes, state that the next 18 months will be not the best period for cryptocurrency. He is confident that the interest in digital money will decrease, which will affect the rate of coins.
Vinny Lingham, CEO of the American startup Civic, state that Bitcoin had no chance of existence. Even if his rate rises , he will still fall to $100 per one BTC.
“Do i think we’ll have another bubble? Probably, because people just don’t learn. When it hits $20,000 again, it will fall back to $100 or something like that”, – said Lingham.
As you can see, the estimates are diverse, and there is no clear idea about the upcoming growth or reduce. Therefore, any forecast should be reasonably judged. Till then, cryptocurrencies continue their hellish way to a stop “Anti-record rate of 2018”.
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