The first quarter of 2018 did not end well as many analysts had predicted. Figures gathered on March 31, 2018, reveal a stunning blow to the market as the top 5 cryptocurrencies and altcoins experienced a major financial nosedive.
The market, which ended 2017 on a high note and started 2018 with a collective value of $612 billion and reached a high $820 billion on January 8, failed to capitalize on the increase. At the close of the 2018 1st quarter, the crypto market value had fallen by 48% to $261 billion, leaving heads turning, and speculations rife on the future of this new financial asset.
A Bumpy Ride
The cryptocurrency market gained increasing appeal and rose to fame due to its anonymous and decentralized features. Investors envisioned new ways of evading federal taxes, as well as ease and simplicity of use, even as they raked in gargantuan profits. However, several changes that have led to a decline in cryptocurrency popularity occurred in the last three months.
The absence of regulations and rising scams that have swindled investors billions of dollars brought the cryptomarket under attack. This has captured the attention of governments with regulators in Japan and the US calling for increased vetting and rules surrounding transactions occurring on the crypto sphere.
Japan’s Coincheck was hacked in January in an incident that saw consumers lose about $530 million worth of cryptocurrencies. Following this incident, some cryptocurrency players in countries like the UK have turned to self-regulation. We have witnessed greater government scrutiny in Japan and US while countries like China and India have considered absolute cryptocurrency bans.
The market suffered another blow when internet tech giants, Google, Twitter, and Facebook announced bans on all crypto related adverts. While these issues could have taken a toll on digital currencies over the last three months, the focus must now shift to what needs to be done to enable the cryptomarket to regain its lost ground moving forward.
According to Piers Mana, co-founder & systems architect at Roux.io, educating consumers on how cryptocurrencies work is critical is the cryptomarket is to regain its value.
“In light of the recent cryptomarket shifts, there are at least three major opportunities for recovery. One opportunity lies in the education of non-technical consumers. The blockchain is built on trust and trust requires understanding. To date, there have been few successful efforts made to educate consumers about the value of this emerging technology. Education is key to the longevity and stability of blockchain technology in general,” Mana says.