November’s cryptocurrency market situation has definitely gotten under our skin. We’ve probably seen it all by now from panic sales and devastating headlines, to the unyielding statements of the experts who are convinced that nothing critical has happened.
Like many other people involved in the crypto industry, we have tried to understand what caused this crash and where the road will lead us in the future. And the best way to get to the bottom of it is to have a look at the opinions of professionals.
Who To Blame
When everyone was slightly relaxed and almost started to get used to Bitcoin being suspiciously stable, suddenly the whole market crashed and one of the most popular theories in mid-November was that the BCH hardfork was to blame. Brian Kelly, the founder & CEO of BKCM, a digital asset investment firm, commented on the situations as follows:
“After a real quiet period, with some of the lowest volatility in Bitcoin history, all of the sudden things exploded today. So what happened? Bitcoin Cash, which forked from Bitcoin last year, is doing a hard fork of their own. Now when you do a hard fork, everybody usually agrees. But in this particular case, not everybody is agreeing. So we’ve got ourselves a crypto civil war, and that has people in the market concerned.”
As we already mentioned, Brian Kelly was not the only one who considered BCH hashing games to trigger the drop. Jehan Chu, Co-Founder of Kenetic Capital pointed out that those who are “crypto drama queens” are responsible for what has happened:
“Bitcoin’s previously solid price anchor was unmoored by the recent Bitcoin Cash fork and is unlikely to recover anytime soon. Craig Wright’s antics have exposed the fragile relationship between decentralized technology and the outsize influence their figureheads wield. Until blockchain technology proves more useful than the people behind it, price levels are unlikely to remain.”
However, some other cryptocurrency experts refuse to accept the idea of BCH’s influence. Crypto Rand, cryptocurrency trader and technical analyst, shared his views with Cointelegraph. He noticed that the market simply got what was unavoidably coming to it:
“I don’t think there is a huge conspiracy against Bitcoin behind the drop. BTC has been hovering over a slight uptrend support. But we can see how every time that BTC touched that support it bounced with less and less strength while continuing a downtrend on volume. That points out a weak setup, what was seeing as stability can be considered also as lack of strength to push new higher lows and define a stronger uptrend.”
Another thing that might have contributed to the situation is the change of mood in mining circles. Nvidia and Advanced Micro Devices, the companies who are the current leaders in supplying mining hardware reported a sudden drop in sales.
However, it still remains unclear whether this was caused by the fact that mining has become not so profitable anymore for various different reasons, or if the crash that changed the game so drastically.
Headlines on Chinese miners dumping their equipment on the street didn’t really help make things better either. However, if the Bitcoin price continues to drop, it will be a serious problem for miners. Sam Doctor, head of data science research at Fundstrat Global Advisors, described the situation like this:
“Because of the current depressed price, many bitcoin miners have been unable to sustain operations.”
Long-Term Perspectives of the Crypto Market
But many experts are absolutely sure that it’s not a reason to give up. Gabor Gurbacs, a digital asset strategist and director at VanEck, suggests not paying too much attention to the market price of digital assets:
“Large financial institutions are more focused on proper market structure than short term price fluctuations. How do we properly value digital assets? How do we decide the custody of digital assets? Are their ETFs available with proper market and investor protections? Most large institutions do not really care if Bitcoin ends 2019 at 3,000 or 10,000. I think market structure is getting better every day and crypto is starting to look more and more like the commodities and equities markets.”
Kathleen Breitman, co-founder of Tezos and the CEO of Dynamic Ledger Solutions also calls to forget about the price:
“Price is, by and large, a distraction. I’ve seen a lot of ups and downs. I have a lot of conviction in the technology’s long-term promise. I never check prices…I think it’s kind of a distraction for people — for smaller minds.”
Kristjan Kangro, founder and CEO of Estonian blockchain firm Change, in his interview to The Independent, also said that we should concentrate on developing the technology and not the price charts:
“As such, it doesn’t matter what the price of bitcoin is, what matters is how blockchain restructures our societies and economies. We are seeing this restructuring happening today and productivity will follow. In short, even if bitcoin becomes obsolete, the underlying blockchain technology that has spawned an entire industry will still live on.”
And there are indeed others who, like Mike Novogratz, ex-hedge fund manager, formerly of the investment firm Fortress Investment Group, admit the importance of the technology and yet are still concerned about the financial side of things:
“Revolutions don’t happen overnight. While I believe in the underlying technology and believe in the crypto movement, when prices get stupid, I sell. A lot of my friends in crypto just couldn’t let go. They were saying, ‘This is going to change the world.’”
The Bottom Line
Whatever caused the crypto market crash we have to deal with the consequences regardless. While some can’t keep their cool during the times of this bear market, and sell, others prefer to remain level-headed (or at least they pretend to), ignore the price, and use the time wisely by focusing on developing the blockchain industry instead.
Lumi Wallet loves to educate (occasionally)! Let’s discuss your thoughts on the future of cryptocurrency market on our Telegram public chat! Or you can follow us on Twitter, Facebook, and Reddit if you want to get your daily portion of crypto-knowledge.