Bitcoin became popular in 2014 when more people started investing into the Blockchain industry which has seen remarkable growth now. Apart from Bitcoin, there are other coins that people have used to trade or invest in, making cryptocurrency markets expand with superb speed. After months of rapid rise, it looks like the frenzy is coming down which has made crypto-market start to fall. Analysts have accessed possible causes of the downturn in fortune of cryptocurrencies, and this writing piece will explore these things as studies have shown. Although some coins like Bitcoin are still striving, others have lost the earlier swagger that they had.
Analysts have shown that the main problem of cryptocurrency is lack of innovation from creators which has made several coins slip into oblivion after seeing success when they were initially launched. For example, creators are trying to bring out “a new Bitcoin” although the one that is already in circulation is still being heavily demanded. Those newly created coins will inevitably fail even if they’ll enjoy early success which will adversely affect the crypto-market. It’ll take more creativity from coin creators to come up with ideas that will see them produce coins that’ll last. Being more inventive will produce digital currencies that will continue be demanded by people that want to invest.
Another issue affecting crypto-market is the fact that banks and other big financial institutions have started accepting cryptocurrency as a legal tender. Although some creators might see it as a victory for Blockchain industry, looking deeper, you will see the different ways that it will disrupt the Blockchain industry.
With big institutions going on with these digital currencies, a time will come when only those big names will make profit from cryptocurrency which will drastically affect the market. Banks will look for ways to impose restrictions on transactions that involve digital currencies making people to lose interest in investing. The market is still standing today because there are numerous humans still trading, but once restrictions come into play, those traders will leave making the market crash. The crypto-market looks like it’s failing now because some traders have already started pulling out because banks have become big players in Blockchain industry.
Studying the market, you’ll see that lack of trust in these digital currencies has helped the market to dwindle. Due to its volatility, traders have lost huge sums of money that they didn’t imagine before going into trading. Their failures have made other prospective traders lose interest, and when there are few traders, the market will quickly fall. Apart from the lack of trust, ignorance on how the market market works has seen some merchants lose valuable funds, and the complexity has made others back out from trading. There are various success stories on cryptocurrency, so the few problems it’s facing doesn’t mean that it will collapse soon.
New ones are ushered in always, yet the market looks like it has attained stability than it used to have. To end, the slow down in the frenzy doesn’t mean that the market is going to fall.