Reason Why the January 2018 market correction was great for crypto - Only4Free - Cryptocurrency Connection

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Reason Why the January 2018 market correction was great for crypto


Why the January 2018 market correction was great for crypto





It may have been an ugly watch for many but the January 2018 price correction across cryptocurrency markets was one of the best things that could have happened for its long term future.

Although a significant amount of people lost money during the month due to weak hands, panic selling and mainstream media-driven FUD, the correction was absolutely needed in order for crytocurrencies to prove their legitimacy in terms of their long-term future.


Manically poor coverage by mainstream media

Special mention has to be given to mainstream media which propagated the mania that followed cyrpto in the month of December with poor news reporting, bias and a lack of basic understandings communicated to the public courtesy of mainstream media outlets.

This was most evidenced by the segment on CNBC where viewers were talked through how to buy Ripple which led it to hit an all time high price of $3.79 on January 4, 2018. This all time high was a climb of 58,207% from its price of 0.0065c exactly 12 months earlier.

Unfortunately for the image of cyptocurrency, this was the only angle most mainstream media outlets were interested in. There was little mention of the countless failed projects or a clear definition of blockchain utility.

In the month of December, my city's most reliable newspaper was publishing at least one news article on cyrpto per day. Prior to that, it was closer to one article per month.


The fall of January 2018

To illustrate the impact this media coverage prompted, we only need to look at the total market capitalisation figures over the past three months.

On November 17, 2017, the total market cap was $228 billion.

On January 8, it reached a high of $830 million – a rise of 264% from November 17.


Following various announcements, the total market cap fell down to $428 billion on November 17 – still a rise of 87.7% from three months earlier.

But for those who bought into crypto at the peak of its mania, it was a decline of 48.4% - again the angle elected by most mainstream media outlets.

Over the past 12 months, the total market capitalisation of cryptocurrency was up a whopping 2,646% from its value of $16.69 billion on January 17, 2017.



Screen Shot 2018-01-26 at 10.05.46 pm.png
Crytocurrency market capitalisations from November 1, 2017 to January 26, 2018. Source: coinmarketcap.com



Putting the gains in perspective

Whilst the three month gain of 87.7% from November 17 pales in comparison to the other figures mentioned, it is still a phenomenal gain which was worthy of a harsher correction.
Over the same period, if an individual had bought Apple Inc. stock on November 17, 2017 ($170.15) and sold it three months later ($179.10), they would have had a gain of 5.26%.
The crypto gains driven by ill-informed mania was never going to be sustainable.

Key benefits of the correction

One of the best things to take away from the correction of January 2018 is the lessons learned by those who lost their money due to weak hands.

Cryptocurrency is still in its infancy when you consider its market cap of approx. $500 billion to the New York Stock Exchange’s of $21 trillion.

Whilst market leader Bitcoin endured a sizeable drop in it’s price during the correction, the most damage was done on altcoins that had significantly less market capital.
It meant that those crytocurrencies which did not have the teams or technology to backup their overzealous claims took significant hits to their organisations whilst strengthening those which had genuine technology in the market.

It showed the world that research into the field of cryptocurrency is paramount for any successful investor and unfortunately, those who did not understand what they were investing in have suffered the most.

Where to from here in 2018?

Now that cryptocurrency has attracted the mainstream media attention it got in December, it is impossible for us to have gains remotely similar to the 2,646% we got over the past 12 months.
It is, however, going to be a very exciting year with a number of projects set to launch following several years of development where their token prices have been entirely speculative on their roadmap updates.

Although press coverage around crypto was of poor quality in 2017, it is shaping up for a much brighter 2018 now that the world is taking cryptocurrency seriously since the correction proves it is living up to the principles of more traditional assets and securities.

Source:
https://steemit.com/cryptocurrency/@pennystox/why-the-january-2018-market-correction-was-great-for-crypto

If you like this article, please vote for him at here

Thanks to @pennystox



Tags: crypto news, crypto analytics, reason why market 2018 drop down, great for crypto, cryptocurrency, btc, bitcoin news, reason why, crypto was of poor quality


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