Hello steemians
Over the past few months,the crypto currency market and atmosphere has extensively experienced an unfavourable price valuation situation commonly known as the BEAR PERIOD.
Its more like a worst nightmare come true,prices of various coins dump at free will,lack of regular inflow of cash into the market,massive decrease in the total market capitalisation and overall weak morale and drive by crypto dudes...
This bear market and so called dip has been existent for up to 5 months till date which the main cause was been tied to massive sell offs by some whales according to some crypto analyst and bloggers.
I strongly believe that these sell offs are just a result of many causes of the dip and until these causes are tackled accordingly,we would always have sell offs and an unhealthy crypto environment
My reasons and analysis are stated accordingly below but I will evaluate each cause in separate posts for easy reading and to form a comprehensive series
1~ ADVENT OF LENDING COINS
2~ ETHEREUM AND ERC-20 TOKENS BUSINESS MODEL
3~ SCAM CRYPTO PROJECTS
4~ BITCOIN PREDICTION MARKETS
5~ PUMP AND DUMPS
6~ CRYPTO TECHNICAL ANALYSTS
7~ BITCOIN HYPE
ADVENT OF LENDING COINS
Lending coins started to exist in the crypto space as early as February 2016 when the first lending coin BITCONNECT came into existence through a fund raising campaign and flourished successfully to hit a market cap of over 2.5 billion dollars before its decline and shutdown in January 2018
Lending coins were a pyramid(scam) type of crypto currencies that offered daily interest for holding it which was done through lending(lock) it out for a fixed period of time,there were different packages and profits to be made according to how much money was invested into lending coins.
Moreso,after the successful thrive of Bitconnect,over 500 other ponzi coins sprouted into existence which all came into existence through various an ambigous private sale and ico that took place in various price increase phases in which an average of 50million were raised per ponzi coin.
Lastly its useful to note that crypto dudes also got used to massive gains from lending coins. the circulating cash been poured into these ponzi coins cant be estimated but will account for at least over 100 billion dollars....which all vanished into thin air after the death of ponzi coins.
ANALYSIS OF THE LENDING ERA AND ITS EFFECT ON THE CRYPTO SPACE
Diagnosis
50 million raised x 500 ponzi coins = 25 billion dollars
Bitconnect = 2.5 billion dollars
Over 100 billion circulation capital invested into ponzi coins which made it thrive
Notable Variables From The Diagnosis
The money invested into these ponzi icos were invested by 3 set of people listed below
•~ existing crypto investors
•~ new investors
•~ whales
The result of this is that the money invested by this 3 set of people is crucial to crypto survival and smooth existence
•~ existing crypto investors: buy and trade coins from time to time to create some sort of balance in the space,although their goal are focused on short term accumulation and flipping...it is still healthy for crypto....most individuals in this section lost their capital to ponzi coins
Hence low trading volume,less individuals to invest average sums in legit ico and related schemes....the funniest part is that the organisers behind these schemes dont believe in crypto and thus cashed out the money realised from their scam projects.
•~new investors:are responsible for new inflow of cash into crypto that makes the market bullish and somewhat stable,the main problem associated with this group losing their money to ponzies is they have no standard knowledge and experience about crypto and thus panic and sell off their remaining portfolio[bitcoin,ethereum etc] thinking the whole system is a vicious scam!
•~whales: are the backbone of crypto,their capital is the fundamental behind the price of most coins,they are usually known to be the silent deciding voices behind most successful projects...most whales find prospective projects they believe in and pour in most of their cash into it and even buy more when there is a slight dip.
During the lending era,most whales got greedy and pulled out their capital from prospective projects and invested in ponzi coins because they saw it as a bigger catch,most of them lost their funds to ponzi coins in the end.
This drastically affected the crypto space as most of the circulating cash of numerous whales were tied in lending coins which means less investment into ico's which further explains why most ico's dont acheive their fundraising goal anymore.
I WILL CONTINUE THE SERIES IN MY SUBSEQUENT POSTS AND LINK THEM TOGETHER
PLEASE NOTE THAT SOME ASSUMPTIONS AND FACTS IN THESE POST ARE MADE FROM PERSONAL EXPERIENCES AND ANALYTICAL DEDUCTIONS
