Today, the price for Bitcoin unexpectedly dropped below the proverbial $6,000 resistance line to the high $5,000s. This is consistent with a number of past estimates and predictions about the real price of Bitcoin and its derivatives. There are a number of explanations attributed to the price drop; though the actual reason may be too convoluted to elaborate. Nevertheless, recent events affecting crypto occurred too closely to the price change to make a correlation hard to ignore. These involve new Japanese regulations, potential price manipulation, and the loss of public interest.
The recent string of hacking attacks costing tens of millions of dollars were the last straw for Japan’s Financial Services Agency (FSA). The attacks started with the Coincheck hack that costed investors $530 million. And more recently, the South Korean exchange Conrail advised that they had a “cyber intrusion” that involved the Pundi X (NPXS), Aston X, Dent and Tron coins. The loss is estimated to be approximately $40 million. The FSA reacted by ordering six smaller Japanese crypto exchanges to enhance their auditing and security systems. This includes stronger scrutiny of accounts and mandatory Know-Your-Costumer (KYC) and Anti-money-Laundering (AML) policies.
These incidents sent a shockwave through the industry which reflected an almost immediate drop in Bitcoin prices. Regulation has always been an antithesis to the unregulated nature of the crypto market. Investors, developers, and exchanges never react positively to the news of potential regulation. And for good reason; while regulation is necessary to protect individuals’ investment, it will also deny the exponential growth and profits seen in the crypto market. Both of which are unmatched by conventional markets and investments.
Price volatility is a constant variable in crypto currency trading. It is a two fold event; in part is created by individual decisions fueled by greed. And second, it is a suspected presence of controlling entities. To shed some light into the multiple accusations, US Government investigators are actively looking into the trading practices of several crypto exchanges. This creates for an unhappy feeling that too much government interference will destroy the current freedom in the market.
However, regardless of how unwelcome the government encroachment is, it is an important step into creating a clear playing field for all participants. As there have been several occassions where price manipulation has served to enrich the minority while hurting the majority of investors. This is essential for the future of Bitcoin; as Wall Street investors are watching the development of the crypto market with keen interest. But, they are unlikely to enter it unless there is some form of guarantee for their money.
Unfortunately, too much regulation and manipulation are turning crypto paradise into a desert.
The dismal performance of the crypto market is a major disappointment for buyers and believers of crypto currencies. The bullish market that captured the attention and imagination of the public in late 2017 is all but dissipated. And, the prolonged bear market coupled with constant red is depressing and makes for a boring scenario. This drives buyers away draining the market from much needed cash.
Despite the present chaos, price reversals are also seen as a good omen for the future; one where Bitcoin sheds scam ICOs, and speculators. Leaving a stable market that produces steady growth. So far this year has been all bad news; $1.1 billion have been lost in 2018 alone due to cyber attack of many forms (51%, phishing, API hijacks, etc). Neverhteless, all multi-billion dollar investment groups are still bullish about the future of crypto. A future where regulation guarantees a safer, more secure, trading space; one filled with new opportunities and gains.