The price of Bitcoin and other major cryptocurrencies has plummeted in the last days, forcing experts to think about it and give investors cause for concern. Bitcoin dropped to $5,050 on November 21, 2018, and has lost nearly 19% of its market share of $110 billion for the past two weeks. Today bitcoin price is $4,332.
The main cause of the crash remains unclear. However, confidence is certainly dwindling amidst a flood of recent warnings about the future of the cryptocurrency and renewed market volatility.
Many experts believe that the collapse is the result of Bitcoin Cash Fork. Bitcoin ABC and Bitcoin SV emerged from the hard fork as the BCH developers could not agree on the future of the cryptocurrency. Brian Kelly, the founder of BKCM, confirmed that the hard-fork was the reason for the break-in.
The CEO of Ark Invest made a more consistent statement, saying that many investors only sell Bitcoin to avoid capital gains taxes. Since the IRS classifies cryptocurrencies as property rather than currency, which can generate up to 39% tax, initial investors now have to pay taxes on the profits made in 2017.
A revolutionary reason for Bitcoin
The upcoming launch of Bakkt — a groundbreaking global ecosystem of regulated digital assets — is also likely to be a major factor in the decline in cryptocurrency prices. The company plans to offer Bakkt Bitcoin Daily Futures (USD), the first cryptocurrency associated with the Intercontinental Exchange (ICE), which is managed by the New York Stock Exchange.
With this announcement, companies such as Microsoft and Starbucks are now collaborating on a platform that will enable customers and institutions to share digital assets worldwide.
According to KPMG, cryptocurrencies require “institutionalization” — or the involvement of banks, fintech companies, payment institutions, exchanges, and other industry entities. Bakkt is therefore seen as a bold first step towards institutional investment and building a global Digital Asset Network.
The bullish run to follow is likely to increase the current market capitalization tenfold, said Joey Krug, co-chief investment officer at Pantera Capital. It is expected that the price of Bitcoin will increase after launching Bakkt Bitcoin Futures on January 24, 2019.
Author: Marko Vidrih
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