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What Could Turn Bitcoin, Ripple, Ethereum And Litecoin Around?

This article is more than 5 years old.

Bitcoin, Litecoin, Ethereum and Ripple are lumped together into the same category by some investors—the cryptocurrency assets that are ready to collapse.

That’s according to Linda Butcher, cofounder of Rewards blockchain LTD., who sees better days returning in the cryptocurrency markets.

There have been better days and worse days for major cryptocurrencies. The better days were back in November and December, when the major cryptocurrencies raced to new highs in a bullish rotation pattern. The worse days have been the last seven days, as they all have raced toward old lows in a bearish pattern. Bitcoin is down 19.26%, Ethereum is down 25.90%, Ripple is down 21.28% and Litecoin 26.65%--see table 1.

Table 1

7d Price Change For Major Cryptocurrencies

Cryptocurrency %7d
Bitcoin -19.26
Ethereum -25.90
Ripple -21.28
Litecoin -26.65

Source: Coinmarketcap.com 3/30/18 at 10:30 a.m.

This crash in major cryptocurrencies comes roughly three months since the last one, and extends across the entire chain. Only seven cryptocurrencies out of the top 100 advanced in the last seven days, while 93 declined--see table 2.

Table 2

Number of Cryptocurrencies That Advanced/Declined In The Top 100 Ranks

Cryptocurrencies Advance/Decline Number
Advance 7
Decline 93

Source: Coinmarketcap.com 3/30/18 at 10:30 a.m.

What’s driving the renewed sell-off in major cryptocurrencies? An advertisement ban is certainly one of them. It has certainly taken some of the hype away from cryptocurrency markets.

Then there’s government regulation, a sensitive issue for cryptocurrency markets. “The crypto market is hypersensitive to government regulation,” says Butcher.

But she sees stabilizing factors, like the funds sitting on the sidelines. “There are certainly stabilizing factors in this market that will ultimately influence prices. The substantial funds seem to be sitting on the sidelines waiting for the bottom.”

What could take cryptocurrency markets off the bottom? “I believe the market will start to respond as more public companies take cryptocurrency mainstream,” adds Butcher. “These companies will be leaders in establishing blockchain as a lasting technology giving confidence to the global market and cryptocurrencies.”

“We have to remember that March 30th of 2017 Bitcoin closed at $1026 and as of today it closed $7165.  By all accounts that is a massive 12-month run not seen in any other market,” continues Butcher. “That doesn't seem like a crash to me.”

The trouble is that bringing more cryptocurrency to the market will raise the “horizontal” supply of cryptocurrencies, which is close to 1400 already. A larger supply in turn will further depress rather than boost cryptocurrency prices.

Meanwhile, investors should be reminded the old Wall Street adage: past performance is never a guarantee for future performance.

[Ed. note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment. Disclosure: I don't own any Bitcoin.]