China Rattles Crypto-Market as Ripple (XRP) Falls 30%+ to Third Place
Several cryptocurrencies have had a rough day today as many of the leading digital assets on the market are not performing as well as their values are not able to hold. As Bitcoin and Ripple have had poor showings on trading platforms, many analysts believe this is a scare worth dumping everything owners of cryptoassets hold. A number of unfortunate, broad announcements have caused the overall market to suffer over the uncertain future which lies ahead. This quick sell-off is a just another reminder of how volatile the cryptocurrencies have become especially coupled with the skepticism and reluctance for new investors to test the market.
The first important event of the day was from Coin Market Cap removing Korean exchanges from their website in order to display a more accurate value of altcoins. As the Korean trading platforms are generally higher in value compared to the trading sites that are used more prominently in North America like Binance and Bittrex, the REPORTED value of the coins naturally dropped. This sparked a massive sell-off which lasted long in the day and wiped out a tremendous amount of value to the cryptocurrency market. The fact that Coin Market Cap did not announce removing exchanges beforehand exacerbated the issue as the market slightly ticked back up once the online index issued a statement. Investors must be aware that this cryptocurrency market is still the unregulated and the website had no responsibility to warn their consumers prior to delisting the Korean exchanges. I would venture to say that the people in charge of Coin Market Cap may have sold their currencies, removed the higher priced trading platforms allowing the short sellers to commence trading, then bought their cryptocurrencies again before finally making the announcement. Buyers must be aware that if this was the case, this is still legal as there are no regulations put in place and cryptocurrency is basically the wild west of virtual trading.
Another wild report that put a second beating on the market came from China as the government may start pressuring cryptocurrency miners to stop operations. After leaked documents from the Chinese internet-finance regulatory group surfaced online, the government’s intentions are to push local governments to constrain cryptocurrency miners to force an “orderly exit” from their mining operations. There is no greater BTC mining country in the world than that of China and slowing their cryptocurrency operations would put incredible stress on the market let alone halting them entirely. As the market once again becomes unclear of the direction in which the digital economy is going to go, there is serious concern put forth to the resources being used and towards a potential financial fallout if the market were to take an even further beating. Without replicating the efficiency of bitcoin mining in nations outside of China, the burden of computations for the blockchains must be placed elsewhere. Although this will produce greater demand in other parts of the world, the profitability will certainly lower which may coax more people to leave the sphere of cryptocurrency mining.
A large portion of my assets are in Ripple and Ethereum of which I am still on the positive side of both even during the crash. In my eyes, this is a phenomenal time to enter the market as cryptocurrency continues to show the potential in multiple business contracts of which I have already reported. Clearly everything that the government gets involved with eventually becomes less efficient and more expensive to the consumer. By straying away from this traditional monetary system, we see that the currency recently developed is far superior than that which was created many generations ago. The future is bright with altcoins built for specific applications and with mining as well. Time will prove that committing capital early on will pay dividends later. As I have stated, many of these coins are long-term investments and must be treated as such so selling now to make a dollar today will not be as valuable as holding and making two tomorrow.
