I listen to a lot of reputable Youtubers within the Crypto-space. However, over time I realized a lot of these guys simply don't know what they're talking about sometimes. Yes, I am bullish on cryptocurrencies but as a seasoned investor you need to pay attention to things outside of the cryptocurrency space and these guys simply just DON'T do that. Whenever cryptocurrency is challenged, they simply cry FUD. It is all good and dandy until the recent price drop like crazy, so was it all just FUD? Or is there really some validity to all of the news that clearly point the other direction toward cryptocurrencies?
Truth be told, besides a few segments of die hard individuals most people are still on the sidelines when it comes to cryptocurrencies. Companies that have tried Bitcoin mostly have abandoned it which begs the question, what's the reason behind such technology which many claims to solve world problems? If it does exactly that, why are these companies abandoning it? If real life scenarios can't use Bitcoin, besides labeling it a "collectible" similar to the likes of jewelry, diamonds, or even Magic Cards what other use does it really have? Below are some of the reasons mainstream Youtubers give in regards to the massive recent price drop:
Bitcoin price drop is due to the upcoming Chinese New Year
If you look at previous years, besides a small dip of 10% in the timeline during Chinese New Year itself; Bitcoin pricing has not been effected in comparison to Christmas. It is common for the Chinese to gift each other in the form of money rather than an actual product, as a major contributor in the cryptocurrency mining space you can bet that the relatives that received money will most likely turn back and put that amount into the form of cryptocurrency thus going straight back into the market.Bitcoin price is going to moon because bankers are getting their bonuses
There is no data backing up any of this claim at all. Most Wallstreet guys have no solid understanding in cryptocurrency has portrayed frequently from the guys from CNBC. If the guys that are actively trying to understand cryptocurrency through research from the Finance space are reporting incorrect data with cryptocurrency, what does it tell you about the regular investment banker? Yes, they are even further away from understanding a total picture of cryptocurrency if at all. Besides a 5-10% portfolio which to diversify their investment which many industry giants suggested, what makes us think that more money will be poured in at a market that's showing signs of weakness?Bitcoin price is going on a rebound from a technical analysis
This is by far the most ridiculous. If there is no adoption of cryptocurrency in businesses, why would Bitcoin price rebound besides more hype? There needs to be real constructive reasons to solidify Bitcoin prices when it bounces back up and STAY up. Other than that, knowing that lightening network is coming into integration where many have been talking about for at least half a year...are there other developments inside Bitcoin itself? Sadly, not much.The search of buy bitcoin is going down
I think this is the result of skepticism within Bitcoin and not due to the interest in Bitcoin. If you're an investor and you are looking into a technology that's not working or companies having issues integrating it into their platform, would you continue to invest in that same business? Chances are, most likely not.
Bitcoin is controlled by the rich / investment institutions and they are manipulating the prices
Most top Bitcoin holders are not active traders. Billion Bitcoin holders such as the Winklevoss twins who runs Gemini and Roger Ver who has in many occasions mention that they are holders of Bitcoin and not traders. The real so called "whale traders" are not usually the die-hard believers of Bitcoin and is simply there to make a quick dollar. It is not to their interest to have the market down or up for too long and definitely not a down market all together because you don't win shorting Bitcoin now that the contract with CME is over. Most top banking institutions (Chase, Goldmansachs) have word out about prohibiting cryptocurrency trading or cryptocurrency products, why on earth would they get into manipulating Bitcoin? This theory seems a bit far fetched.The following is what I believe the real reasons behind the Bitcoin drop:
The US Stock market correlates closely with what happens in cryptocurrency
If we just take a look at the history of NASDQ and the DOW, we can see that the market has been on a bull run for the most part. The last few weeks hasn't been ideal for the market, it is easy to assume that perhaps more money is being pulled out as a whole or the economy has perhaps hit the peak. Therefore the correction may not just sit with cryptocurrency alone but economy as a whole.
Increasing regulations from countries in China, Korea, India, and here in the US
Whether we like it or not, China has banned cryptocurrency trading and countries like Korea and India has increased its skepticism in Bitcoin and other cryptocurrencies. Centralization is not FUD, that just means that governments are taking this very seriously which although in the short term hurts the community who loves decentralization. However, with regulations this also prevents the next Bitconnect from forming to steal billions from people.Tether / USD
This is by far the weirdest one of them all. Does Tether own all the USD it claims to have in their secret vault that's located in a "secret" location? It is almost like people lying to their kids about Santa Clause and just because you get the gifts from Santa Clause that doesn't mean that Santa Clause exists. Of course all the people that had Tether forced on them by exchanges now will have to wait and see how the cases go with Tether/Bifinex versus the US Government. If proven to be BS, you can bet Bitcoin prices will drop even more.
I still respect a lot of the cryptocurrency veterans and Youtubers. However we definitely have to read in what others talk about outside of the cryptospace and therefore make a correct decision on what investments to go into and which cryptocurrency to give it a pass.
Your Fellow-Cryptoknight,
- mastaz -
Thanks for sharing
Thank you for that reasoned piece based on empirical data. This should be how we all asses this area, rather than emotion and rumor. Well done!
This space is still filled with many emotions as seen with many markets that are not as mature. It is always important to keep our eyes open and take in things with a grain of salt.
Thanks for sharing, i hope it comes back to normal soon
I hope so too mate, but if it drops lower maybe it is a time to put in more money into this space...but we shall see what happens.