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$700 billion wiped off cryptos. What's next?

November 27, 2018 13:00

In 2017 the market experienced one of the greatest booms in history. Bitcoin led the cryptocurrency market soaring to over 2,000% higher at its peak.

Just a year later, in 2018, cryptocurrencies are making a new history. Dubbed the 'great cryptocurrency crash of 2018' it's a story of an epic implosion that rivals the year 2000 dot-com crash.

Source: Admiral Markets MT5 Supreme Edition BTCUSD, Weekly - Data range: from 18 October 2015 - 26 November 2018 - performed on 26 November 2018 at 8:29 PM GMT

With Bitcoin and the rest of the cryptocurrency market approaching historical lows, everyone is asking what's next? Let's take a look.

What's the latest cryptocurrency news?

The public is still reeling at the near $700 billion that has been wiped off the overall cryptocurrency market cap. However, even though cryptocurrency prices have plummeted, there are still those holding on to their cryptocurrency investment, hoping the market will turn around.

But, there are also those who have been speculating on prices going lower through innovative trading products such as cryptocurrency CFDs which enable traders to profit from rising and falling markets.

Whether a trader, investor or just an academic, everyone wants to know what's next for the crypto market, so let's first look at the Bitcoin crash.

Why did Bitcoin crash?

Within the overall cryptocurrency list of Bitcoin, Bitcoin Cash, Ethereum, Ripple, and others, Bitcoin is still the biggest of all the digital coins.

Source: Bloomberg

The Bitcoin crash has inevitably brought down the rest of the cryptocurrency market. One reason being is that some of the reasons behind the Bitcoin crash are applicable to all cryptos. Here is a list of just some of the issues facing the cryptocurrency market:

  1. Illegal initial coin offerings (ICOs)
  2. Money laundering
  3. Tax evasion
  4. Cyber thefts
  5. Exchange outages
  6. Loose to zero regulation
  7. Excessive speculation

Global governments are trying to get a handle on the situation with Bank of England Governor Mark Carney leading the charge by warning of cryptocurrency 'anarchy' without a global governmental coordinated approach. With governments discussing the cryptocurrency market at the G20 Summit in November 2018, more oversight may be coming.

One of the major reasons for the hype of cryptocurrencies in 2017 was the attraction of institutional capital and the adoption of digital currencies to pay for goods. Unfortunately, the volatility that the cryptocurrency market has had in the past few years, thanks to the long list of issues listed above, has helped institutional investors shun the market, which aided in accelerating the crash.

However, while many people are cutting their losses in their cryptocurrency investment, there are those who are taking a long term view on the market. In fact, according to some the cryptocurrency market may be 'on the verge of a paradigm shift' thanks to a new startup called Bakkt.

Who's betting big on cryptos in 2019?

It seems like the New York Stock Exchange's owner, the Intercontinental Exchange, is betting big on cryptos for 2019. There are those who believe that Bitcoin is on the verge of breaking through as a mainstream currency thanks to the hot new start up Bakkt, which is backed by Microsoft and Starbucks.

What sets the company apart is the fact it is an institutional investment geared to creating more institutional investment for cryptocurrencies. The level of credibility the Intercontinental Exchange, Microsoft and Starbucks bring to the table is what the market is banking on to make cryptocurrencies more attractive to other institutions. So let's take a look at what Bakkt is, the latest cryptocurrency news surrounding the company and how it could be a game changer for cryptos in 2019.

What is Bakkt?

Bakkt is designed to help consumers and institutions to seamlessly buy, sell, store and spend digital assets. Their platform is designed to be integrated for trading, warehousing and commerce. But, most importantly, it is the backing of the Intercontinental Exchange that will bring proper market infrastructure and regulation to the crypto market.

The company's flagship offering is to build a US-based futures exchange to clear Bitcoin contracts in a single day. This clearinghouse will be backed by a guaranteed fund supplied by Bakkt - a game changer in what is currently a loosely regulated industry.

However, Bakkt eventually wants to service the whole supply chain of cryptocurrency - from casual investors to commerce giants like Starbucks. In fact, Starbucks will be the first company to work with Bakkt on converting digital assets into US dollar to buy cups of coffee. Instead of swiping your credit card, they want you to be swiping your Bitcoin app.

So how could you take advantage of this?

How to trade cryptocurrency in 2019

The cryptocurrency market is hugely volatile. With big ideas coming in 2019, there could also be big opportunities. The question is: How do you prepare yourself today for tomorrow? The best way to prepare trading a volatile market is to have the right products available to remain flexible in ever changing market conditions.

One such product is trading cryptocurrency CFDs. Here are just a few of the advantages:

  1. Leverage up to 1:2
  2. 24/7 trading on EUR crypto crosses
  3. Go long and short

These flexible trading conditions are due to the fact the trader is merely speculating on the price movement of the underlying asset (the cryptocurrency you are trading), rather than owning the asset.

With Bakkt proposing to launch in January 2019, could this be the turnaround story for cryptocurrencies? If it is, how are you preparing for it?

Crypto cfd trading

See the current state of crypto

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