Why Cryptocurrency Markets Are Not Doing Great Right Now
Whenever the topic of cryptocurrency is brought up, the feedback on the market for cryptocurrency being down for the past few months or even years is almost a sure response. The argument that cryptocurrency has not tangible and real value and people have finally realized this is a common explanation being given for the cryptocurrency market being on the red. But is it really the reason why?
There was a time before when everyone wanted to invest in Bitcoin, especially when it reached almost $20,000 in value last 2017. This Bitcoin Revolution review explained how trading Bitcoin in platforms has become convenient for the traders and general users, and detailing the potential profits an individual can make in trading Bitcoin. However, the past couple of months has not been kind to Bitcoin or any cryptocurrency, with plummeting market value and decreasing confidence of investors in the digital currencies.
But what has really caused the cryptocurrency market to go down, and is there any chance for recovery? Here are some of the reasons why the Crypto Market is down:
Profit in crypto market has become less straight forward
Before, one can easily profit in cryptocurrency mining and trading buy getting in and buying when its low, and getting out and selling when the value is high. Recently however, this classic “buy low, sell high” strategy has become not quite effective as before. The increase in the number of Bitcoin mining companies and the competition it brought with it has made earning Bitcoins much more difficult, which directly affects its value in the market.
This, however, doesn’t mean that cryptocurrency is on its way to a definite decline, as there is still a number of opportunities for Bitcoin and its blockchain technology that we have not explored yet. That said, blockchain technology can be used in a variety industry such as cyber security, healthcare, blockchain real estate transactions, banking, etc. This technology might have a lot of potentials and using it just to maintain a virtual ledger of crypto transactions can be considered as not using the technology to its potential.
Cryptocurrency’s lack of liquidity has delayed widespread adoption
Bitcoin and cryptocurrency in general is now known for its liquidity, in fact it’s one of the common criticisms thrown at it by people. This lack of liquidity has ramifications in price stability and investor confidence. This has caused a reluctance of businesses and investors to make a widespread adoption of cryptocurrency.