There is no doubt that the cryptocurrency market is in a bit of a funk and due to a collection of recent events, the situation has gotten progressively worse. However, many of the events are over exaggerated and in some cases completely wrong, and it is evident that we need to study the market correctly.
Bitcoin is down to panic levels at $8,200 per coin due to a series of events that have had a negative impact on the market, and other cryptocurrencies such as Ethereum, Bitcoin Cash, and Ripple are affected even worse. The main issue, however, is that many of these events are not real worries. Instead, it is what is sometimes referred to as FUD – fear, uncertainty, and doubt or in plain English, events that are not as devastating as the media and users make them out to be. In some instances, they are even completely wrong.
This is What’s Happened
This past week there have been three specific developments that have taken a hit on the market. But as we explain them further, you might understand why the worries are exaggerated.
The first event is that Facebook decided to ban all cryptocurrency ads which naturally had a negative impact on the market. However, in the official statement from the company, the reason why Facebook has decided to ban cryptocurrency ads is to limit the number of scams which eventually could lead to a more fair market.
The second reason is that India’s finance minister held a speech where he declared that the country of India “does not consider cryptocurrencies legal tender or coin…and will take measures to eliminate illegitimate activities.” Unfortunately, many users interpreted this as if India was banning cryptocurrencies all together, which is not true. In fact, India has decided to take a similar stand on the matter as many other countries have and trading is still allowed.
The third issue is the most serious one and that is that US officials have started investigating Tether and some fear it has been used to inflate the value of Bitcoin. But nothing has been proven yet.
Should you not invest in cryptocurrencies?
We couldn’t answer that question for you but we can say that it’s highly unlikely that the market will disappear. The most likely reason to why the cryptocurrency market is struggling is that it grew to fast and is now trying to find more stable levels. If that turns out to be true and the volatile nature of the market was limited, it could open up the doors to more traders, which in the long run is a very good thing.
If you are looking to invest in cryptocurrencies we suggest you do your own research and then invest in the coins you believe in with a service you trust. IQ Option offers 14 different cryptocurrencies and is a fully regulated broker that we suggest you check out.