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Bitcoin continues to plunge – when will it hit the bottom?

Bitcoin peaked at over $ 19,000 in December 2017. It is currently trading at around $ 4,600.

Also the shares of companies with links to the cryptography market have recently collapsed, including chip makers Nvidia (NVDA) and AMD (AMD), which make the graphics cards used by bitcoin miners. The online retailer has transformed the blockchain investor Overstock (OSTK) and the digital payment company Square (SQ) are significantly lower. Each share is falling between 15% and 35% only in the last month.

So it seems safe to say that the bitcoin bubble has exploded. Should investors start relocating bitcoins and other encrypted assets?

Maybe. Some bitcoin bulls are welcoming recent volatility. It may scare some of the momentum investors who have rushed, which means bargain hunters can accumulate bitcoins at a more attractive price.

"Experienced investors understand that digital currencies are the future of money and, as such, will capitalize lower prices to build their portfolios and strengthen their positions," said Nigel Green, CEO of deVere Group, a company financial consulting firm.

Green compared the current shakeout to what happened with the dot-com boom and the next bust at the end of the 1990s. Many Internet titles have crashed and burned, but Amazon (AMZN) is proof that e-commerce has turned out to be a legitimate business and not just a hype.

"Financial traditionalists regard cryptocurrencies as traditional stores used to display online retailers," said Green. "Cryptic crypts are using this current wave of volatility to knock on digital currencies: whether it's Bitcoin or any coin generation, or not, cryptocurrencies are here to stay."

SEC that keeps the Fishers in the eye

It's also a more technical reason, for which the bitcoin is going down.

In the last year, bitcoin went through a division process known as fork. The first fork has created bitcoin liquidity and bitcoin money has recently been split into two other forks. For the average investor, this basically means only more volatility.

But there are still some potential problems for bitcoin and the legion of other cryptos out there, such as ethereum, litecoin, ripple and stellar. Even their prices have plummeted recently.

Part of the problem is a bubble mentality. Short-term investors are all trying to get rich quickly with these cryptocurrencies, as well as with initial coin offerings or ICOs. Those are securities guaranteed by cryptographic assets.

But they are incredibly risky. And the Securities and Exchange Commission is starting to crack down on ICOs that do not exceed regulatory requirements.

Just last week, the SEC fined two companies for $ 250,000 each for failing to comply with the appropriate securities registration laws. One of the companies, Paragon, is working to legalize cannabis, demonstrating that it is possible to combine two investment manias in one company.

"The SEC reminded the cryptic world that has the final word on everything that smells of security," said Naeem Aslam, chief market analyst at Think Markets UK. "The fear is that the SEC will not stop here and could take similar actions against several companies that have adopted a similar path.

Even regulatory problems can only be the tip of the iceberg. Anthony Pompliano, a member of Morgan Crypto Digital, an investment company in encryption, wrote in a recent blog post that some cryptocurrency funds might be forced to close because of the dramatic price drop.

He claimed that many companies will not be able to raise more capital and will not be able to survive.

"The current bear market will hurt in no time, both for crypto funds and for ICO projects, and pain is something that many of these entrepreneurs and managers have never faced," wrote Pompliano.

But he sees the light at the end of the tunnel. Pompliano believes that the current shakeout is necessary. It will free the market from weak hands and leave only the real crypto-believers – as opposed to traders – to thrive from continued global growth in the cryptic world.

"Things will be much worse before they get better." All right, remember, leads the markets to get rid of tourists so that real entrepreneurs can focus on building sustainable value, "wrote Pompliano.

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