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At the beginning of March, the cryptocurrency market had a decline huge shot in terms of price. Total market capitalization rose from $ 372 billion to $ 309 billion in one day. Bitcoin was the most affected in this $ 60 billion variation. Although the collapse of the digital market has stalled since then, it has never reached $ 560 billion December last year.
In other words, what has seen the historical maximum of a monumental 828 billion dollars has started to fall slowly. As a result, people's interest in investing in cryptocurrency seemed bleak in the market. Here are the possible reasons why the crypto-market could have gone so abruptly in the last year.
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The Kobayashi incident
Where it all started: The controversial bitcoin exchange Mt.Gox, which failed in 2014 due to multiple flaws in the security of its system, can be said to be an indirect factor for the fall of Bitcoin at the beginning of 2018.
This is because Nobuaki Kobayashi, the main trustee of Mt.Gox sold a Undeclared Amount of Bitcoin and Bitcoin Cash between December 2017 and January 2018. Cryptocurrency experts e passionate Likewise, we believe that this event could have had a major impact on price declines.
A relationship he said that the sale of Bitcoin by Kobayashi brought the price down to $ 6,000 for 2018. Although the trustee's actions were to credit funds for customers who lost access to Mt. Mt. Gox in 2014, it became less pronounced once the price of bitcoins started to fall.
You can read the full report of Mt.Gox creditors Here.
Aftermath: Customers and critics were not happy with the way Kobayashi took away selling bitcoins at the end. A financial means reported "The members of the Crypto community have (understandably) expressed their frustrations with the situation on Reddit:" Why not [Kobayashi] sell the BTC to the auction as other assets are often sold during bankruptcy? If he only sells an idiot on the spot market, he would think you would not be slipping, "wrote the Reddit bitradr user.
Since then, Bitcoin has never been at the height peak price after December 2017. Similarly, other currencies saw the same trend with low and consistent prices from that moment onwards.
Coincheck Hack
Another incident at the start of this year was a large-scale attack on the exchange of cryptocurrencies Coincheck Inc. With 523 million NEM coins worth approximately 534 million dollars stolen, the Coincheck hack was bigger than Mt.Gox in 2014 and was nicknamed the "greatest theft in the history of the world".
Users of Crypto were instilled with the fear of losing their digital currency, even though the hack was only on this type of currency. As a result, it left a bad taste among users, as a result of which they migrated to other currencies / exchange or stopped altogether with encrypted transactions. Despite this unfavorable outcome, the NEM user community remained stable and the market did not observe a steep dive.
Limitation of cryptographic activity
Incidents such as these have meant that many actors, such as the banking and financial sectors, impose restrictions on cryptocurrencies. Furthermore, governments in countries like India, China and Russia have a strong position against crypto trade. In fact, at the beginning of this year India announced that cryptography was not legally used in financial transactions. Finance Minister Arun Jaitley said average that the Indian government "does not consider the cryptocurrency legal currency or currency and will take all measures to eliminate the use of these crypto-assets in financing illegitimate activities or as part of the payment system".
Overall, virtual currency will continue to face criticism due to the vulnerabilities in the system which, as a result, will lead criminals to find new ways to hack cryptographic exchanges.
perspective
Our article highlighted some large-scale instances where the cryptocurrency system was dangerously vulnerable. Although the virtual market is growing in terms of user base and unique currencies, it does not seem to have the brilliance it had in previous years in terms of value. This can be attributed to two facts: security loopholes and acceptance in the financial ecosystem. Unless they have control, virtual currencies are considered to fall in value.
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