Back when Bitcoin went close to $20,000, there was nothing stopping it from going mainstream. A year later, today, it’s the exact opposite and things look entirely different. Prices have fallen 80% of what they were back in 2017.
There is no doubt, the crypto market is experiencing a terrible bloodbath. Things have been going south from the first quarter of 2018. And the fact that the industry is experiencing major changes in development and updates is partly to blame.
But this hasn’t been the only reason for the fall of crypto prices. Bitcoin cash, for example, is recovering from a hard fork that happened towards the end of 2018. Its rising mining cost as well has aggravated the drop and Bitcoin cash now suffers a dropping hash rate.
This article explores issues surrounding crypto’s fall;
Are Cryptocurrencies Avoiding Capital Gains Tax?
A recent law that included crypto profits under capital gains tax has generated tensions among players in the industry. The best way for traders and investors to avoid capital gains tax is to sell off their crypto before April. Investors, after realizing that they are stuck on large tax bills are left with little options, to pay tax or sell the crypto.
Bitcoin Cash Split
As mentioned earlier in this piece, Bitcoin cash fork indeed affected the prices. A squabble between conflicting groups (Bitcoin ABC and Bitcoin SV) from the Bitcoin cash community led into endless debates on ideology. The disagreement was so intense, a hard fork couldn’t be avoided and on November 15th last year, the two went separate ways.
As a result of the split, BCH has suffered especially when it comes to hash rate. It has caused some serious uncertainties in the crypto space and is been counted as a reason for the falling prices.
The Delay Of Bakkt
Earlier, a company owned by the New York stock exchange announced it would be including a Bitcoin trading platform. The news generated a frenzy among Bitcoin enthusiasts for the awaited launch in December 2018 and was perceived as the savior for the already falling prices.
Bakkt launch was later postponed to late January. The news disappointed traders and crypto enthusiasts and this added insult to an injury.
Regulatory and Global pressures
While the SEC and the Commodity Future Trading Commission have changed their perspective on Bitcoin being a security, their stand on ICO tokens have not changed. The SEC chairman Jay Clayton reiterated their stance on ICO tokens and a necessity to be regulated and conducted in line with the commission’s guideline.
On the other hand, global pressures have not ceased on matters surrounding crypto. Stringent measures like tightening up of central bank policies have been recommended.
Investigations Into Controversial Stable Coin
The department of justice has rejuvenated its investigations on crypto market manipulation. Among the issues being actively investigated is whether tether was used to inflate Bitcoin’s prices in 2017.
In addition to the aforementioned issues is the recent ban of crypto ads in major platforms such as Google and Facebook. And it must have motivated the drop of cryptocurrencies.