3 Possible Reasons For The Current Bear Market: MtGox, SEC and Potential Binance Hack
At the moment of writing, STEEM was trading at a mere $2.75 while Bitcoin plummeted back below $10,000. There are at least 3 potential causes for this.
I'll take them one at a time, based on their relevance (and impact).
1. Mt Gox Trustee Sold around $400 Million Worth Of Bitcoin In The Last Few Months
According to Coindesk, the MtGox trustee sold between December last year and February 2017 around $400 million worth of Bitcoin and Bitcoin Cash. The trustee acts in the name of those suing MtGox and his main task is to recover lost funds. So he's only doing his job,
But obviously, when you dump almost half a billion dollars worth of Bitcoin, the price will drop like a rock.
In my opinion, this is the main reason of the bearish market we're seeing for about 3 months now. There is a certain impact of regulatory news (as we will see below) but the main problem comes from the market itself. Dumping crashes price. Always.
2. SEC Says All Exchanges Must Be Regulated
According to Bloomberg SEC just issued a statement in which all exchanges must undergo regulation.
“If a platform offers trading of digital assets that are securities and operates as an ‘exchange,’ as defined by the federal securities laws, then the platform must register with the SEC as a national securities exchange or be exempt from registration,” the SEC said in the statement Wednesday.
This is not something new and many of us saw this coming. Yet it still seems to affect market to a certain extent.
3. Rumors About Binance Being Hacked Surfaced Earlier Today
According to Business Insider Binance halted withdrawal today, after investigating some "unauthorized market operations".
A few users reported that their alts have been sold at market price and now they have only Bitcoin. The first statements from Binance point to the fact that the victims all had API keys for automated trading or bots, limiting the circle of potential causes.
All In All, A Really Bloody Wednesday
The cumulated effect of these news is literally crashing the markets. The highest magnitude event is by far the selloff of MtGox, which is still "mtgoxxing" us years after it happened.
If we make abstraction of the emotional toll this event puts on all crypto enthusiasts out there, I would say we're in the middle of a major healing event.
But of course, like in any healing, it will first hurt.
Big time.
I'm a serial entrepreneur, blogger and ultrarunner. You can find me mainly on my blog at Dragos Roua where I write about productivity, business, relationships and running. Here on Steemit you may stay updated by following me @dragosroua.
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I think it was a forgone conclusion that the regulators would eventually come after the exchanges, but the MtGox news seems very bullish to me.
The sell pressure from the MtGox liquidation will subside, or has subsided already, so it's more likely that we'll be headed into another bull market in the near future.
That's what I meant by "healing". There's still an amount almost 4 times bigger than what has been already sold yet to hit the markets, so we may still expect some waves...
Everyone wants to sell or tak it one way or another what about the rest of us
Thanks for the analysis... upvoted/resteemed
And what they mean by "regulation" is that they want their cut.
Weapons tech ain't cheap!
I disagree. Instead of building faster, bigger jet fighters.
Invest in a bunch of flying bricks. Anyone trying to invade our airspace runs into a cinder block at mach speeds, ripping it to shreds. And all you have to do is put a bunch of these in their way.
Century-long, embezzlement or culmination of a series of neglect, the disappearance of 650,000 bitcoins continues to be a mystery.
The story had started badly. When he bought Mtgox in February 2011, Mark Karpel was notified by the seller, Jed McCaleb, that he was already missing 80,000 bitcoins. The main stock exchange where to buy and sell bitcoins would run after those missing "chips" for years, without ever finding them. Worse, the mass of missing bitcoins on the call would grow and reach the astronomical figure of 850,000 at the time of bankruptcy in 2014, a figure reduced to 650,000. Mark Karpelès, "The Wolf of Bitcoin Street", is currently on trial for embezzlement. He was ambitious however to "clean the planet bitcoin"
Now, we know that MtGox sold about $400 million worth of bitcoin. Do we know how much they still hold and plan to sell again? Except we know that, I don't think we can still say the market is healing. My opinion though.
This is about the biggest dump since December 2017 thereabout.
From the article linked above.
And bitcoin gold
@dragosroua again yet another reason why we need to find a new standard to value the altcoins on as when BTC crashes the whole market does too. This is no way for any market to operate. People would At least like to know there was some stability in a super volatile market pegged to BTC.
Trust, I think it is the key word. Even if "trust" is an ambiguous word...
How it can be done? Sincerely I don't have the answer...
This is the perfect time to sit back and do some more steeming. 2-3 years from now when a lot of coins are 10-100x their current value, everyone will be wishing they had done more to accumulate them at lower prices. I think the btc chart over the last 5 years is a good indication of what we can expect for the overall market
I'll use this to console myself....
Thank you @dragosroua for saving me from unnecessary fear and worry with the above message.