Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
While that the crypto market valuation has gone so low, there might be a possible opportunity to dig in.
All is indeed not well in the cryptocurrency market as we know. Over the last ten days, the market has made substantial losses putting a deeper hole in investors’ pockets. Today itself, the crypto market made a new low with valuations dropping below $140 billion for the first time in 2018. According to CoinMarketCap charts, the crypto market cap made a new low of $136 billion at 10:52 UTC. The last week’s downfall eroded nearly 33% of the market valuation, almost $60 billion.
At the press time, the Bitcoin price has slipped by 3.6% and is currently trading at $4372.46. After its dramatic price fall earlier on Monday this week, Bitcoins seems to consolidate between $4200-$4000 levels. At the same time, we can see that Bitcoin’s market cap has dropped the lowest in last one year, and is below $80 billion. One thing which Bitcoin continues to maintain is the market dominance. Even with the latest price drop, Bitcoin captures a 53% share of the overall market cap.
Is it the Right Time to Buy Bitcoin?
Looking at the volatile behavior of the crypto market, no one would want to burn their fingers at this time. Moreover, the crypto market continues to give further setbacks to its investors. After consolidating for months over $6000, many investors hoped that the bottom has arrived. However, the market had a bitter surprise in store for investors giving another major blow.
Hence it is difficult to convince existing investors to make fresh BTC purchase at this time. However, if someone is willing to make a fresh entry and still continues to believe in Bitcoin’s future, the time looks ripe to buy some BTC at this time. There are a few reasons behind this.
If you observe the crypto market in entirety, Bitcoin is not the only poor performer of the show. In fact, other altcoins have performed drastically bad which has contributed majorly to the latest market crash. Also, as the overall market falls, money pulled out of other altcoins is directed towards Bitcoin. There is no denial to it that Bitcoin is still the most trustable crypto asset among crypto investors. As we saw, even though with the falling price, Bitcoin market dominance still remains consistent.
At the press time, Bitcoin tops the chart of crypto assets with a market cap of $76 billion. The second most-valued cryptocurrency XRP has a market cap of $18 billion. It shows BTC still is the darling of crypto investors and there is no imminent threat to Bitcoin from any other cryptocurrency.
The Entry of Institutional Investor
Even though the crypto market has been on a losing streak this year, institutional players continue to penetrate the crypto market. Financial giants like ICE and Fidelity have already announced big projects by next year. Recently, ICE said that its retail trading and Bitcoin Futures platform Bakkt would go live in January 2019.
Also, Fidelity Investments has announced to launch its crypto subsidiary Fidelity Digital Assets by Q1 of 2019. Fidelity Digital Assets will provide institutional storage solutions, products, and services. If you see most of the institutional products are centered around Bitcoin. It means that if tomorrow crypto market starts the northward journey with institutional money flowing in, Bitcoin will be the first one to drive the momentum.
“Bitcoin’s latest plunge is evidence of the need for greater regulatory oversight to give a boost to investor confidence,” said Herbert Sim, Chief Commercial Officer at Cryptology, a cryptocurrency exchange based in Singapore. “There is already a huge amount of capital tied up in cryptocurrencies, in excess of $100 billion, so why allow it to continue being a rogue market?”
“In order for the space to move forward and investor confidence to settle, regulators need to put standards in place to separate the weeds from the roses in the cryptocurrency world. Having oversight of the cryptocurrency “Wild West” will legitimize, and subsequently stabilize the industry, which will allow it to reach the next step of maturity.”
“Institutions and governments alike are beginning to accept that cryptocurrencies are likely to become an integral part of the financial system. The last few months have seen the beginnings of clear initiatives from the FCA and SEC to build out a coherent policy. It’s just a shame it’s taken this long for them to get on board.
Regardless of price moves, it’s clear that the cryptocurrency community is here to stay, with institutions offering new modes of trading such as options, futures and trading on margin. As a result, in order to move forward the government regulators need to find a way of establishing a working relationship with the community, as opposed to being at odds.”
Gavin Smith, CEO at Panxora commented exclusively for Coinspeaker:
“While discouraging in the short term, this fall may have some beneficial long-term effects. Large financial institutions have become increasingly involved in the space. While this has done a great job of hurrying the regulators along and bringing crypto into the mainstream, it has also had some detrimental effects on the market.
Hopefully, this slide will be a wake-up call for those in the industry to remember that crypto is far more than just an investment prospect. This could mean that participants in the market begin to refocus on its original use as a government-neutral transaction currency, not simply an investment token.”
The Ailing Altcoin Space
The altcoin space is loosing heavily over the last few weeks which is one of the primary reasons behind the market crash. The growing regulatory involvement is causing several ICO tokens to either pull back or fall in compliance. As a result, the valuation of such tokens is on a steep fall. This indirectly has also affected the Ethereum (ETH) price as there was a flood of ICO projects launched on the Ethereum blockchain network over the last year. Nevertheless, Ethereum is facing its open problems with network upgrade and scalability.
On the other hand, there are new concerns around Bitcoin Cash ever since its hard fork last week. The two divided camps continue to engage in intense battle over the hash war with investors and exchange getting no clarity on whom to support. Bitcoin Cash has been beaten black and blue with its price crashing 60% in the last two weeks.
It is not that all altcoins are faltering. Some projects like EOS, Dash, and Stellar continue to make significant development in terms of their technology. As a result, they are posing a strong challenge to the once strong players. All the three crypto projects now have a name in the top-ten assets by valuation.