Over the last few days, the price of bitcoin has increased and dropped unexpectedly and this has caused numerous speculations about the stability of this crypto. However, it is important to remember that this is not the first time that this digital currency has surged and later dropped in price across various exchange platforms.
Big investors who have spent millions of dollars and even set up mining facilities across the globe are not worried about the price drop, as they understand that it is normal in a trading asset that is prone to numerous factors. According to an article posted on CCN, one of the executive editors working for Barron Magazine released a report that stated that most of the investors are confident that their investment will bear good returns despite the drop price. They are also of the idea that fiat currency will soon be replaced by digital currencies as more people and corporates continue to embrace the potent power of blockchain technology.
It is also important to note that the crypto market valuation has dropped by an overwhelming 55% over the last five months. The currency valuation is $372 billion from $829 billion at the start of the year. In January, some of the infancy blockchain technologies that were at the testing face such as EOS and Tron managed to exceed the $17 billion mark without breaking a sweat.
One of the main reasons for the large drop in the valuation of this market is the fact that the price of most of the common digital currencies such as Bitcoin Cash, Ripple, Bitcoin, and Ethereum dropped by half in most of the exchanges. The change in valuation forced most of the investors to drop their aspirations to invest in the market but the big investors who are already deep in the game are optimistic that the market will bounce back to profitability before the end of the year. Don’t get it twisted though; the market is still profitable but not as expected and foreseen by most experts.
Brian Kelly, one of the founders of BKCM and a renowned contributor of CNBC Fast Money is on record stating that h was shocked that the market was not shaken by the entrance of JPMorgan and New York Stock Exchange into the crypto market. He further went ahead to state that if the two entries had done so in January this year when the bitcoin price hit the highest mark ever, the cryptocurrency market would be worth more than $1 trillion.
It is also important to note that the number of banks, investors, retail traders, and other parties who have invested in this industry has dropped significantly. The new investors come with the perception and goal of selling off their coins within a short period of time while the large investors see the altcoins accumulation period is a golden opportunity to make huge profits trading the same altcoins.