4 Key Reasons Why Crypto Is Down Over $370b

January was a difficult time for the cryptocurrency market. Just days following the currently highest peak of Bitcoin, Bitcoin and its cousins, altcoins, all crashed together. Peaking at almost $19,000 many were just waiting for the crash to come, and rightly so. A lot of savvy traders who had read up on their trading 101 just before the Bitcoin boom could have made a pretty penny in this time.

In only 10 days, Bitcoin and a variety of altcoins dropped over $370 billion in value. That’s more than 40% of the entire cryptocurrency market’s value. Even the most seasoned veterans whose cryptocurrency trading 101 knowledge stems from the early 2010s were hard pressed to be optimistic in the face of those numbers.

Bitcoin dropped by almost 60% in January 2018 when compared with December 2017. There are many factors that contributed to this, so let’s study the most impactful ones to recognize the signs earlier in the future.

• 1) Russian Stance On Crypto

The Russian President, Vladimir Putin, stated in January that cryptocurrencies will most likely need more oversight in the future. He indicated that he believes that legislation will definitely be required in the future, but that at the moment, the Russian Central Bank was equipped well enough to deal with any issues that may arise.

This didn’t do well to assuage any fears or uncertainty. Russia’s stance is basically that they’ll eventually get around to cracking down on cryptocurrency. Given that many nodes for major cryptocurrencies are located in Russia, this has rightfully caused a certain degree of panic in many Bitcoin and altcoin investors.

• 2) Chinese Stance On Crypto

Similarly to Russia, China has also made its stance on the subject clear. China took a similar stance to Russia, but has been more aggressive in early enforcement. China’s been taking a hardline stance against the crypto community, especially its use of computing power to generate new tokens didn’t seem to sit well with the Chinese government.

China has issued a blanket ban on cryptocurrency, but has also said it’s exploring proper regulations and restrictions to make due with it, in due time. Similar to Russia, this definitely did not inspire any sort of confidence in any crypto investors. China is a major powerhouse alongside Russia and is the at the time of writing, the biggest home to Bitcoin main nodes, an integral part of the currency’s blockchain.

Should China somehow target all of those and shut them down, the Bitcoin network would suffer a tremendous loss in its networking structure. Naturally, this fear contributed to the drop in prices.

• 3) South Korean Stance on Crypto

South Korea was one of the first countries to openly express its intent to crack down on crypto trading. The main rationale behind the decision seems to be the country’s fear of money laundering cases and other illegal applications to the currency.

South Korean officials have mentioned the potential need to implement tax reform to include the trade of digital currencies to get a firmer control over the South Korean involvement in the community.

This was arguably an even bigger blow to the market than China and Russia as South Korea alone represents almost 20% of all trades done in cryptocurrencies.

• 4) Collapse of BCC

Bitconnect was another cyber currency that had a decent market cap going. The currency had always been criticized for the manner in which it used loans to attract new investors, which is considered bad form in general.

The returns promised by BCC were insanely high, offering as much as 0.25% return per day. Right after the announcement, the currency’s value dropped by over 90%, nailing the final nail into the Bitcoin and altcoin coffin for January 2018.