January 16th is very bad day for cryptocurrency market. Value has been lost across entire market, altogether whooping $50 billion left the market. This big correction was a third correction in past ten days. Major cryptocurrencies such as Bitcoin, Ripple, Ethereum and Bitcoin Cash declined by 11%-30%. At the same time smaller cryptos recorded even larger losses. This is not surprise, more of a rule in crypto market
In top 10 all cryptocurrencies have lost a lot of value. Only NEO lost little more than 2%, which signals that market losses weren’t connected to Chinese market since NEO is basically Chinese Ethereum and most of capital invested in it is from Chinese market. Current situation on the market can be seen on the picture below.
Small Cryptocurrencies Lose Big
This has become normal occurrence on the cryptocurrency market. Whenever there is big correction smaller cryptocurrencies lose more than big ones. This make sense since investors in smaller crpytos are usually almost exclusively in short term speculations. Investors in bigger cryptos are often long term investors who do not pull out at the sign of first trouble. This makes cryptocurrencies like Bitcoin more stable.
This is first major correction on the market in 10 days. First two were triggered by authorities in China and South Korea when they announced regulating markets or even in case of China completely shutting down mining operations in that country. However it remains unclear what is the root cause for this third correction.
Market Cap Went From All-Time High $830 Billion To Current $584 Billion
This all happened in the past 10 days. Approximately $246 billion have left the market. This is good signal for bulls to buy even more at cheap price. Although bearish trend might continue… Perhaps this recent developments are echo of Vitalik Buterin’s words:
“So total cryptocoin market cap just hit $0.5 trillion today. But have we earned it? How many unbanked people have we banked? How much censorship-resistant commerce for the common people have we enabled? How many decentralized applications have we created that have substantial usage? In the last 3 years, the crypto market cap has increased by 200x, but I definitely don’t feel like crypto’s potential has increased by 200x. In some key sectors (eg. payments) it has even regressed. The answer to all of these questions is definitely not zero, and in some cases it’s quite significant. But not enough to say it’s $0.5T levels of significant. Not enough.”
Creator of Ethereum hold a lot of authority and enjoys a lot of respect from everybody in cryptocurrency market. He has a point, while blockchain is revolution it hasn’t fully developed yet and thus it can’t justify high markets caps we are seeing these days.
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