The world of cryptocurrency saw a bullish rise in price over the past few months. Untill December 22, Bitcoins and other alt coins saw their price skyrocketing to the moon little did anyone know that the prices were going to see a steep decline.In fact, according to data from OnChainFX (reported by Coindesk): in the past few weeks, all of the top-20 cryptocurrencies have hit all-time highs.
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Bitcoin fell as low as $12.5k which triggered a drop off among essentially all other major cryptocurrencies, this amounted to more than a 20 percent decrease in the entire global cryptocurrency market cap.
Only time will tell what caused such a huge dip, but here are the 5 possible reasons why bitcoins and other alt coins prices dropped so low.
1) Christmas And New Year - The Season To Be Spending.
As comical as this might seem to be this is the time of the year when most people spend their yearly savings on family and other things. Though cryptocurrency offers a large number of benefits to average consumers than fiat currency does, it has not yet been adopted by the masses owing to the high volatility.
The end of the year marks the time when these investors would be most likely to convert their winnings to cash.
2) Overloaded by Altcoins
It's not only Bitcoins that saw a hug surge in the price, Alt coins like Cardano, IOTA, Verge and others saw a huge increase in price that seemed too good to be true. This might have made many new and experienced investors to move from the holy grail of cryptocurrency "Bitcoins" to other alternative coins.In the process of diverting funds from BTC, enthusiastic crypto traders may have also temporarily destabilized the Bitcoin market.
3) Bitcoin Cash Confusion on Coinbase
Bitcoin cash split off from the original bitcoin on Aug. 1 after a group of developers decided to try to improve bitcoin transaction speeds and costs.Investors in bitcoin at the time of the split should have received an equivalent amount of bitcoin cash, but Coinbase did not immediately do so, and said it would provide support by January.
When Coinbase announced that it had added bitcoin cash to sell an buy on the platform the offshoot currency soared more than 70 percent to a record high of $3,813.70 and was trading near $3,339 , according to CoinMarketCap. The original bitcoin was down about 10 percent to near $17,074, according to Coinbase, after earlier dropping as low as $15,005.
4) Hacking and Bitcoin Regulation
Given below are some of the hacks that has happened in the past few years,
*August 2010: Bitcoin Hack
*March 2014: Mt. Gox Hack
*January 2015: Bitstamp Hack
*June 2016: Decentralized Autonomous Organization Hack
*July 2016: Steemit.com Hack
*August 2016: Bitfinex Hack
*July 2017: CoinDash Hack
*July 2017: Parity Hack
*July 2017: Veritaseum Hack
*August 2017: Enigma Hack
*November 2017: Tether Hack
There is a chance that the general concern created in these Mishappenings and the new regulations on taxing the earnings from trading in countries like the U.S and India might have scared off potential investors and even caused existing participants to cut their losses.
5) The bubble was real and the crypto winter is coming
If we are entering the crypto winter, the past eight years of Bitcoin has revealed two things: 1) that Bitcoin always bounces back—and with it, a whole roster of cryptocurrencies (with inevitable casualties along the way), and 2) the demand for decentralized currency and blockchain technology is here to stay.
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What do you think are the reasons why the Prices Crashed ?
