Bitcoin is Falling for the Same Reason it's Ever Falling

It's not because of a hack on an exchange.

It's not because the price is "correcting."

It's not because of news, period.

It's because PotCoin rallied 20% then crashed after Dennis Rodman wore a promotional shirt while breaking down about Korean disarmament on CNN. It's because leading "experts" still roam the cable networks spewing nonsense without any logical underpinning. Because Dash outperformed bitcoin today. Because there's still $350 million in Dogecoin. $146 million in Dentacoin.

Bitcoin is selling off because everything in crypto is selling off. Correlations are in essence, going to one, meaning even the biggest digital assets are dropping right alongside the weirdest wildest stuff out there. It doesn't mean bitcoin or ethereum are a lost cause, it just logically means that, as I wrote back in February, the pain is likely to worsen before it improves.

Why? Despite all the progress being made toward developing this new market, price moves suggest it's still all about the pump. It is a game of musical chairs, where ICOs and chat rooms and PotCoin CNN hits are the tunes that keep the game going -- until the garbage gets taken out. Not everyone taking part thinks that way, but those playing the game are the ones driving the direction right now.

The fatal mistake of bitcoin bulls in 2018 has been comparing this year to previous ones. Near-ubiquitous awareness of crypto, the myriad ways it can now be traded, the size of the market were all game changers. As I wrote back in February, the fact bitcoin's slump happened in tandem with the futures launch, Robin Hood adoption, incessant media coverage, etc, was a clear warning sign that institutional Wall Street adoption was a long ways off.

Dogecoin, Dentacoin, whatever your own personal "garbage coin" is, will one day be a lot closer to zero than it currently is. And until some big regulatory event or market stability makes crypto palatable to a broader investment base, expect correlations to stay high.

The crypto market is not mature.

It's a teenager going through its biggest challenges yet and has a long way to go. Middle school is just starting.

Originally posted on
https://www.linkedin.com/pulse/bitcoin-falling-same-reason-its-ever-oliver-renick/