The latest round of bitcoin price decline or shall be say correction isn’t something that traders and investors should lose their sleep over as the cryptocurrency has a history of worse declines.
There have been instances in 2017 alone when bitcoin price declined by more than 30 per cent on five different instances and that effectively means that the latest bitcoin price decline wasn’t even close to those in 2017. The 20 per cent decline in bitcoin we witnessed yesterday if tolerable if we look at the history of the cryptocurrency.
Ethereum and Bitcoin Cash too witnessed major corrections in 2017 – as much as half of their value wiped out in a matter of days – but both the cryptocurrencies bounced back substantially and went on to register their individual all-time-highs at the end of last year and first few days of this year.
The major correction in cryptocurrency prices was not totally unexpected with ethereum co-founders Vitalik Buterin and Charles Hoskinson having already predicted such a correction because of how the market was garnering increased valuation in a short period of time.
Corrections like these can be seen as health boosters as weak projects, investors and traders will cut themselves off during such corrections and only the lion-hearted will stay in the game thereby solidifying the market for the next surge.
Cryptocurrency sector has been filled with initial coin offerings (ICOs) that don’t have concrete plans or products to deliver because of which the market correction was due and necessary.
While the recent correction led to a $200 billion drop in the market cap of cryptocurrencies, it was necessary to ensure that the market remains stable and strong. Already, in the past 24 hours, the market valuation of cryptocurrencies increased from $450 billion to $520 billion, by over $70 billion.
Everyone has a question of where will the market go from here? One thing is for certain that the cryptocurrency market has expanded manyfolds from where it was in 2016 and early 2017. More and more investors and users have been entering the market and this gives the market a broad base on which it can firmly stand. According to an estimate, bitcoin could reach $100,000 in 2018.
The year 2018 is expected to be a great year for crypto again with prices of some cryptocurrencies setting new records as the year progresses. Regulatory hindrances may impact cryptos, but at least there will be clarity on which do governments and financial institutions stand as far as cryptocurrencies are concerned.