According to experts, the higher the cryptocurrency rate, the more it can decline. On the other hand, this could simply be a signal of the start of a cryptocurrency bull market. Market volume has grown 3,400% since the start of 2017, according to Monday's data. And it becomes unclear how long such growth can last. Let's talk about three main triggers that can stimulate a fall in the price of digital assets.
Regulation
If the US, Europe and Asia impose a ban on exchanges and companies that serve the cryptocurrency market, this will affect the state of the digital currency itself. For example, China banned cryptocurrency in the summer of 2017, leading to the global displacement of people and companies. The market did not collapse, but showed negative dynamics. What could happen to the USA and Europe in such a situation? What is the likelihood of cryptocurrency being banned in these markets? According to some experts, the market's halving in 2018 is likely to be only 10%.
Crypto exchanges and exchanges
Mt. Gox was the main exchange until 2014, as 70% of all trading was conducted on it. At the beginning of 2017, trading on it was suspended, which caused the cryptocurrency market to fall by 80%. There are adherents of the opinion that such a situation may repeat itself. But according to CoinMarketCap, there is currently no exchange that handles more than 10% of all trading. At the same time, according to Hackernoon, the Coinbase company and the GDax exchange are one of the largest exchanges that brings income to the overall cryptocurrency system and plays an important role in it.
If we talk about the Binance exchange, which just six months after its appearance can accommodate 20 thousand new users per hour, the picture changes a little. Some skeptics begin to ask questions like: What if she has problems? What if Coinbase falls?
A large number of exchanges insure against such situations. What could happen if several of them collapse at the same time?
At the same time, there is no reason for much panic, since the probability of such a situation is only 25%.
The opportunity to buy cryptocurrency on credit
Some exchanges trade currencies on credit, even investors themselves can buy on credit.
According to experts, about 3-4% of purchases are made on credit, which may not be available over time paid.
Such situations are just bets on market growth. Pessimists insist that a long period of sideways movement will be bad news for those who are planning to close positions. But such cases have not been observed since last year, which means that only recent participants can lose a significant amount of money. The probability of such situations is 20-25%..
To summarize, we can safely say that individual results are unlikely to have an impact on the cryptocurrency market. At the same time, they are closely related to each other. Which, according to pessimists, can lead to negative consequences.
This is unlikely to happen in 2018. But, if you want to protect yourself, move your digital cash to the usual fiat.
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