Factors that caused the cryptocurrency price plummet this September and how you can benefit and prepare for the future
August was a stellar month for cryptos as we experienced a month wide comeback from the crypto correction period of July. By the end of August, almost all portfolios had reached all time highs.
Zooming into 2017 total market capitalization data on coinmarketcap charts, we can see that the floor at the July correction was at around 69 Billion dollars and the whole month of August is a trek up the mountain as we have been seeing all time highs in total marketcap broken every day. The zenith of everything was at Sept. 1 at 177 billion before things started to get awry.
At Sept 2-3, what was once thought to be a simple retracement, had been backed up by rumors of Chinese going rough on ICOs and imporsing harsh regulations. All those rumors have culminated into...
September 4th - ICOs officially illegal
Everybody by now who invests in crypto or read crypto news has heard about the event that started the plummet this September. To put the long story short, China finally got fed up with the nonsense ICOs that are propagating within their country and damaging their economy. To know more, I have a breaking news article I published a day after the event: https://steemit.com/cryptocurrency/@cryptowarrior88/breaking-news-china-bans-icos-and-raising-money-through-icos-and-the-crypto-world
The country has already prepared a blockchain cultivation garden which will fuel most of the country's processes in the years to come. However, several weeds in the form of nonsense (trash) ICOs with no project or blockchain backup rose up and sucked the money out of Chinese investors.
...So China practically just mowed the lawn...
After the event, cryptos were once again on the rise tremendously but were not given enough time to recover. Another key player Jamie Demon (I mean Dimon 😜)
Video credit: Kamal Glover
Click here for more of this video
Most of us already know about these facts but for those who don't, here are a few bullets:
Its always a war between centralization (Central Banks, Big banks, all banks) against decentralization (bitcoin and most cryptos).
Every second banks steal money from all of us concealed in hidden fees and charges, exchange rates and interest. They cannot make money out of thin air if they don't have anywhere to get it from.
Banks are currently joining up creating blockchain projects which prove to be direct competitors to Bitcoin and other cryptos but these are fully centralized and controlled by them.
I could go on and on in detail but this is reserved for another article in the future. The overall tone and content of his reply on the interview is primarily targeted to the majority who invest in cryptos but are not learned enough. These are people who just know they invested in something thats supposed to be good and something which will gain in value overtime. However when something like this happens and its backed up by plummeting prices, they let their weak hands do all the work.
The result gave bitcoin and cryptos a minor hiccup just when it was recovering...and for Dimon... a LOT more haters most of which are more famous personalities than himself.
Overall, the only single point he made...
"I am not saying go short. Bitcoin could reach $100,000 per coin before it goes down."
As investors we are not in to collect cryptos because we like them, our reason should be to gain profit. Sooner or later bitcoins and all cryptos will reach an all time peak. This is same as all stocks, commodities, hedge funds, real estate, practically all forms of investment. Once we reach peak or at least a good position, we sell and transfer to another new potential investment which will in turn make our hard earned money go further.
P.S.
I really really meant Dimon :)
If you have thought that you have seen enough, well here comes even worse news.
Charlie Lee warning Tweet:
Litecoin creator Charlie Lee (130k Twitter Followers) had forewarned the whole crypto community a day before about things going from bad to worse. I was able to get a copy of his tweet as he took it down and shut down his account for a few days due to receiving a hefty amount of angry backlash from the whole crypto community.
The next day we all received official word from BTCC...
The owner of BTCC is his brother Bobby Lee. However, it is not safe to assume that the anonymous source he trusts fully is the same person. It could be another Chinese guy contact in the government or someone with a good network in China. It does not matter who the informant is what is important is the information.
Also, here is some brotherly love:
Photo courtesy of: https://www.btcc.com/news/en/blog/2015/12/18/litecoin-creator-charlie-lee-meets-fans-at-btcc-organized-events-in-china/
China's move and how it affects the big picture
A few things that people mislooked:
- China has not yet stated directly that holding Bitcoins is illegal in their country.
- Chinese citizens can still buy Bitcoins from other people in other countries and find ways to store it overseas or in their online or offline wallets free from trace - all while the exchanges are currently on temporary closure hold. If they can risk investing in real estate and businesses in foreign countries, how much more with Bitcoin which is so easy to secure and hide.
- P2P currency cannot be killed off, especially if it couples as an investment vehicle as well. Take torrent and other P2P file sharing for example, it still lives on. The thing that is demeaning P2P file sharing right now is that there is not much money to be made from it... so people resort to having so many ads and other mumbo jumbo you have to get over with before you have access to your download. This is not the case with cryptos. There is money to be moved and money to be made.
So...
China is planning to stronghold the money. They do not want money coming out of their economy. They are practically rich geniuses in the business world so it is just natural for them to find ways to monetize as well as centralize Bitcoin acquisition.
What is probably going to happen is:
| They will allow BTC and cryptos to be bought via OTC or any service from the government itself. That way they can track BTC assets of each buyer and also be able to tax every BTC buy. |
|---|
| They will allow BTC and cryptos to be sold to the government or exchanged to fiat currency but still it has to pass through the government as well. |
| They will at some point promote their "Chinacoin" country virtual currency to be widely used and somehow be implemented as well into this system. |
| Exchanges will be back before you know it once they submit proper paperwork, licenses and become fully compliant. |
It is a backbreaking blow for the Chinese economy if they ever steer clear from cryptocurrencies. They know that too well. In fact, they also know that fellow Asian countries and the USA will be laughing hard if that is the case. What they are doing after they have mowed the lawn is to plant their own seeds.
Currently there is not yet any news with regards to OKCoin and Huobi receiving any notices from PBoC. It is safe to assume that these guys are working their asses off just to be compliant and to survive. It's not as if they are just looking up in the sky waiting for the ban hammer to fall on them. Also, they will need a bit of time to close as they are too big to close right away.
Treat this as a single whole event of China banning all exchanges to fulfill better motives for their economy because in general most people will again mislook this as:
| BTCChina gets shut down... a left jab on Bitcoin and cryptos |
|---|
| OKCoin shuts down... another right jab on Bitcoin and cryptos |
| Now Huobi gets shut down... bitcoin and cryptos are getting pummeled |
If this is the case then cryptos won't be given much time to recover yet in the end they will eventually. Fully agree with Charlie's last statement. However, as what I have said earlier, will all the repercussions at stake, I don't think at all China will be banning bitcoin entirely. In fact, read below for more details on this and also the good news of whats to come.
Update just came in VIABTC and Yobtc announce they need to close.
Here is more on the Yobtc announcement:
https://www.yobtc.com/doc/documentById.shtml?cid=433
Turns out one of the biggest reasons why these exchanges are being forced to announce closure is that they are operating without a bookkeeping license. As to the details and scope of the license, there is still much to dig up. However, no matter how big the paperwork is needed, it all boils down to being compliant. Here is what Jihan Wu has to say:
Read from bottom up.
Good way to put some common sense there. Overall, with all this drama unfolding and information overload, it pays to have a general guide and grasp of the whole giant crypto market.
The Cryptowarrior and Altmasters team try our very best to give up to date and reliable information for free on Steemit and the best part is our articles always come with a pot of gold in the end.
Finally.. Some good investment advice
All cryptos are at a plummet right now except for very new ones that have pertinent events in their roadmaps/ecosystems that allow them to enjoy a momentary rise in value. You can either...
Temporary Short
If you know what you are doing you can be able to sell at high price and buyback at low price. This is especially good for ETH, XMR, MCO, OMG and other high valued coins. However, take note that it is a temporary short on a bull market due to the events. The long term trend for cryptos is right now bullish. The plummet is just temporary. Take note you have to have a good understanding of the market currently in these times of turmoil before risking a short move in a bull market.
HODL
The safer choice. Technically, when you are holding your assets you are not yet experiencing gains/losses. It is only after the sale is made that either positive or negative profit is obtained. Do not in any circumstance sell at a loss.
Enjoy the Shopping Spree
Enjoy all the crypto discounts and expand and diversify your portfolio. However, never sell a crypto to buy in on a new discounted one. That is just beating around the bush.
I hope this article has enlightened you, fellow trader, not only about whats currently affecting the prices of cryptos but also the ins and outs of crypto trading. Time to make better decisions and gain more money!
Guess what? JPMorgan became the biggest buyer of bitcoin on September 15, 2017
Very good article. It is a very predictable response from China for them to close and attempt to take control of these new kinds of markets - that's just the kind of government that they are: central, closed, and they don't want competition. I expect to see the exact same thing from Western governments.
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