BITCOIN'S LAST BIG DROP IN PRICE WAS THE RESULT OF A SINGLE-PERSON DECISION
That the value of Bitcoin and other cryptocurrencies can be very volatile is no secret. On January 8th, the whole market with Bitcoin at the head of the pack went into a freefall from which it has not yet recovered. Many factors were blamed at the time. It could actually be just one.
Neither the regulations initiated by different governments, nor the frivolous investment of all those who have jumped on Bitcoin's bandwagon in recent months. According to The Wall Street Journal, the culprit for the whole cryptocurrency market collapsing was one person: Brandon Chez.
Chez is the creator of coinmarketcap. com. In 2013, this 31-year-old developer created this page which tracks the changes in the values of different cryptocurrencies from his apartment in Queens. The page works by averaging the different currency exchange markets. When Bitcoin and the other currencies became popular in 2017, coinmarketcap. com became one of the most popular websites in the world and even beat rivals like CoinDesk, Coinbase or Blockchain. info. The revenue source of the site is Adwords advertising.
Source: coinmarketcap.com
So far so normal. The problems began on January 7, when Chez made a significant change in his page that had important repercussions. The developer decided to remove the South Korean market from the algorithm that calculated Bitcoin's price. The reason for this decision is that the value of the currency in this market was ridiculously higher than the rest.
Chez didn't release the change. He simply applied it, devaluing Bitcoin's value all at once without any apparent reason. The response was almost immediate. Prices began to plummet and have not yet recovered. Coinmarketcap.com remains a very popular site and Chez has stayed out of the picture. The Wall Street Journal has tried to contact him to the point of showing up at his apartment, but he neither opens the door nor answers the calls.
It would be very optimistic to say that this incident will not happen again. Coinmarketcap.com or any other page can change an algorithm again and cause the coin to fire or drill back in. It is a problem that has no clear solution until tough regulation (which is already underway in many countries) comes. Until then, this is the price to be paid for investing in cryptocurrencies.
Source: es.gizmodo.com
Poor decision on there part foe sure , You would think he would know better
Definitely a very bad decision... He was supposed to know logically that this action would bring negative consequences to the cryptomoney market. I honestly don't know what went through his mind when he made that decision...
Thanks for comment @jkenny greetings :)
Geez Louise, this is pretty remarkable information. I don't think one person having so much influence is exactly what anybody wants, unless you are that person of course. Very, very good lesson learned. Thank you for bringing it. Be safe.
Of course, yes, certainly a lesson learned.
Thanks for comment @windrockswater greetings :)
That's huge, especially considering that a good portion of the trading is executed in Asia, including South Korea. Yes, the price of Bitcoin on exchanges in South Korea was up to 30% greater than prices on other exchanges. However, simply removing them was not the best solution.
Exactly.... He didn't think about the consequences of the action he took.
Thanks for comment @ericthered greetings :)
yeah, the problem was that he didn't specify what he had done. Just put asterisks next to the stats and made people figure it out on their own.
Right, he announced absolutely nothing of what he would do... He took everyone by surprise. In fact, the market hasn't even recovered yet. I lost 50% of the capital myself because of this...
Thanks for comment @garyfire greetings :)