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After experiencing a fairly massive upward trend in the past year, the prices of crypto currencies or cryptocurrency are now experiencing a downward trend throughout 2018.
Quoting the coinmarketcap site, the price of a number of crypto currencies that have large market capitalization such as bitcoin and ethereum dropped. Tuesday (10/16) at 17.45 WIB, the price of 1 bitcoin (BTC) is equivalent to US $ 6,610.10. This figure fell 49.87% (ytd) compared to the end of last year of US $ 13,187.60.
In the same period, ethereum plunge prices were 70.92% (ytd) from US $ 722.41 per 1 ETH to US $ 210.07 per 1 ETH.
Kanta Nandana, Country Manager of Luno Indonesia, said the decline in the price of the crypto currency could not be separated from the effects of skyrocketing prices of these instruments last year.
He pointed out, the price of bitcoin as one of the crypto currencies had surged more than 100% in just a matter of four months from September to December last year. The rising trend of the crypto currency is booming so many people are hunting for it, including people who are not too familiar with the instrument.
"The high hype from the public makes the price of the crypto currency continue to rise until it touches the overbought point. From there the price starts to fall, "said Kanta, Tuesday (10/16).
He also considered that the decline in the price of crypto currencies was not related to the conditions of global financial markets which are currently experiencing turmoil, especially in emerging market countries. Because, the movement of crypto currencies with conventional investment assets is not linear.
That is, if the performance of the capital market instruments of a country or region is in a trend of soaring, not necessarily the price of crypto currencies is in a similar trend. Vice versa. "So far the cause is still from demand and supply factors," he said.
Likewise, Christopher Tahir, Cryptowatch Co-Founder, Cryptocurrency Community and Education said that the price of crypto currencies had overpriced over the past year. So it is reasonable if this year has decreased. Moreover, the price increase is not comparable with the growth of crypto currency investors themselves.
"The condition is similar to 2014 when the price of the crypto currency fell. So, there is a pattern so that the possibility of next year going up again remains open, "said Christopher, today.
Furthermore, because bitcoin holds the status of being the first crypto currency and the largest market capitalization in the world, then once the price drops, other crypto currencies also decline.