First of all, let me just say that even with huge percentage drops over night, generally speaking, crypto is still up from where it was a month ago. It wasn't all that long ago that the headlines were reading "Could bitcoin hit $10k ?" In my opinion, what has happened since BTC hit $10k has just been ridiculous.
I think that there has been a buying frenzy of uneducated investors trying to cash in on the hype and a lot of that has been because of ridiculous speculative opinions from people who may or may not hold positions where they could benefit from people thinking BTC is still low at $20k. It doesn't surprise me that since there's been an establishment of a future's market, the hype and the price went bonkers. If you were planning to short an asset, you would want it to bubble. You would want people to believe that $20k was "just the beginning" ... But, if you research the asset, it's easy to see that right now, getting in on $20k BTC would be ridiculously risky. Just because blockchain technology is definitely the future of finances, there's still nothing tangible to justify that kind of valuation.
Okay, roughly 4 out of 5 crypto transactions take place in Asia. I think a lot of the banking practices of nations like China and Japan are completely reckless... I think the U.S. plays fast and loose with it's economy, but at least we tend to recognize that our practices are unsustainable and meanwhile, no one can even explain why Japan can indefinitely cancel it's own debt without collapsing their economy. So, while we can check off several problems that decentralized banking will solve on our own turf, I think many Asian citizens feel insecure with their government issued bank notes. On the other hand, you have many Asian governments discouraging citizens from investing in crypto and even starting to put restrictions on cryptocurrencies. So, obviously, if the government was going to force you out of crypto, you would want to get out early before it became a mandatory sell.
Alright, so in the west, we're looking at crypto as an insane investment opportunity (which it has been, but once everyone knows about the opportunity, the opportunity is no more) and that's driving the price up.. and in the east, many investors are looking for an exit strategy due to regulation and recommendation. Between the ability to short cryptos, and the push for the majority of a large segment of the market to exit, the correction that happened last night has been in the making. Honestly, I think we're going to see crazy volatility in the near future and then we're going to see more and more government interest in regulation.
In conclusion, I think it's a bad idea to buy into something that has already hit gains of 1000% or more when the only indicator is that there is a chance more people will keep buying. I would personally recommend researching stocks that pay dividends or gold is always a tried and true solid investment. I think in the end, the winning blockchains are just going to be a revision of governments' central banking systems. At the end of the day, crypto is going to be turned on it's head. It was invented to provide anonymity so people could participate in an international black market and I believe the only reason it didn't get shut down by the government is so that the technology could continue to develop without the government having to assume any risks (like the FDIC having to foot the bill every time there's a security breach and someone's wallet gets hacked and they lose millions) or foot the bill. I think one day, you'll just walk into your local revenue office to get your one and only, permanent wallet address (probably encoded in an RFID chip implant or permanently attached to your person in some fashion) and you'll just trade in your cash and bank balances for credit on the government blockchain... The IRS will turn into a mining operation and if your transaction history starts looking sketchy, you'll be questioned by the authorities. They'll collect their taxes through transaction fees, and be able to prevent all kinds of fraud. The banks will be credit institutes, but I think you would see more responsible lending practices. There wouldn't be a need for the government to bail them out and they would have to assume the risk.. If they participated in questionable lending practices, they'd just go out of business and the market would adjust. That might all seem like a crazy idea, but think about what's more probable: The government handing over the keys to the economy to system that enables it's citizens to operate outside of the law, or, the government using the technology to be able to better enforce the laws? Have fun gambling while it lasts ;)