In 2017, Bitcoin led a motley pack of other cryptos, which saw the alternative currencies reach record highs. These digital currencies hit average highs of 1,400%. After the New Year celebrations, the virtual currencies took a different direction. This time, they recorded an epic bust. But after a while, the dust began to settle. Obviously, the days of celebration are over if the current bear market is anything to go by.
Investors and regulators are grappling with the same tough questions they couldn’t answer when Bitcoin first entered the limelight some five years ago.
This article will answer some pertinent questions about the current bear market and what happens next
Why do many people criticize Bitcoin?
There has been a long list of reputable investors who have openly raked Bitcoin over the coals. The Bitcoin Cash hard fork are even blamed for the current bear market. Legendary investor Warren Buffet called Bitcoin “rat poison squared.” In truth, besides their volatility, Bitcoin and the altcoins have been linked to exit-scams, money laundering, excessive speculations, the list is endless.
However, Bitcoin is increasingly stepping out of line, making regulations necessary. No thanks to crypto advocates who are increasingly attempting to push digital currencies into the mainstream.
Why was 2018 rough?
The significant cryptocurrency bear market of 2018, it can be partly attributed to serious regulatory clampdowns on operators. The fear of huge losses played a vital role in ensuring that cryptocurrencies tanked drastically. As a result, Bitcoin has fallen more than 75% from its peak. Similarly, altcoins are plummeting to record lows.
How do regulators enforce rules?
The approaches that investment regulators employ to clamp down on scammers vary from country to country. In Japan, for instance, the watchdog issues licenses to legitimate operators. Switzerland employs a hands-off system. It’s even worse in China with the confiscation of assets, as well as prosecution. Just like many other countries, the U.S. has yet to formulate a definitive policy on cryptocurrency. Considering the current bear market, US prosecutors are investigating the bull run of 2017. They are attempting to ascertain whether some form of manipulation occurred or not.
What are cryptocurrencies really?
Bitcoin and altcoins are not bills or coins that the government can police like traditional currency. They are electronic assets that a community of users create and monitor using a decentralized approach.
Indeed, people always compare the value of cryptocurrencies to that of gold since it operates in a similar fashion. Therefore, the value depends on what people are willing to pay for it.
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