According to the distributed global investment firm Jonathan Cheesman, Bitcoin fell for five main reasons: macro trend, speculative dominance, regulatory uncertainty, short selling and fraud.
However, as the market and cryptocurrencies as an asset class continue to see improvements in infrastructure and regulation, Cheesman explained that an increasing number of investors will recognize cryptocurrency values as sound and legitimate store values.
“For some, work is now more acute – Venezuela and Turkey are the most obvious examples – and debt sustainability is a real risk for many fiat money. Given the global store of gold, it serves a purpose, but it is archaic. A digital value store is both more practical and more in touch with the growing millennials. ”
Regulatory Uncertainty and Weak Infrastructure
Until 2018, infrastructure for institutional investors and large-scale retail merchants was virtually non-existent. The last obstacle between institutional investors and the CryptoCurrency market has not been taken into custody and there are very few publicly traded instruments that will facilitate the request from the creditor investors to the crypto money.
The weakness in the current infrastructure has led to a large capital accumulation from the wider financial market to the cryptographic sector, along with regulatory uncertainty over cryptographic currencies.
For this reason, the speculative balloon of the crypto-money market in 2018 was similar to the previous bubbles in 2012 and 2016 because on-the-spot correction of the panic sales initiated by speculators and individual investors in the market was triggered.
The 80 percent correction in the crypto-money market has been similar to previous declines, but the expected recovery of the market will be largely different from previous initiatives.
In the past, Bitcoin has not achieved speed at major support levels and has shown no signs of recovery for more than two years. This year, Bitcoin did not go well below the $ 6,000 support level, despite three attempts to get out of the $ 6,000 support level and failed.
However, as regulatory frameworks and reliable regulatory solutions continue to evolve in the crypto-money market, more institutions will be willing to take a greater risk to commit to an early-stage market.
“The authorities around the world are in charge of how to police the crypto in a responsible manner. A decentralized movement is very much a problem in the classification of assets and in the waters of bad actors. As a result, things are progressing slowly, but general regulators have received a tone indicating that they respect potential innovation. Corporate investors, such as regulatory uncertainty, detention, insurance, data and no risk management solutions, have slowed down. ”
Progress in South Korea and Japan
Already, South Korea and Japan have introduced legislation on the crypto-currency and block chain to manage legislation related to the crypto and money chain as legitimate sectors.
The Uzbek government has decided to legalize crypto money exchange, first money offers (ICO) and digital asset mining.
As billionaire investor Mike Novogratz has already stated, it is possible that the upcoming long-term crypto money rallies will be managed by institutions such as pensions and pension funds, because the possibility of adoption of sound conservative solutions in the coming months is high.