The collapse in the cryptocurrency market attests to the importance of the Asian market

The collapse in the cryptocurrency market attests to the importance of the Asian market

During the week almost all cryptocurrencies showed a significant decline in value.

Began falling Tuesday morning on January 16 and lasted for almost a week with some restorations. First, bitcoin has lost about 15% of the cost. After a short growth, its price has continued to drop rapidly. However, some altcoins have lost up to 90% compared to initial value.

The influence of the Asian markets

Courses of cryptocurrency is not the first time react in a similar way to the rumors about the introduction of restrictive measures by governments. This time the reason for this behavior in the exchange of cryptocurrency was regulatory pressure from the governments of China and South Korea.

In the first quarter of 2017, the people’s Bank of China announced plans to regulate cryptocurrency transactions that resulted in similar consequences. However, the fall of bitcoin was short-lived, and soon, the course of bitcoin recovered fully, and after a few days even hit a new price record. This behavior of course cryptocurrencies were observed several times during 2017. This was due to the fact that the governments of some Asian countries made statements regarding the intentions, plans and measures to regulate the cryptocurrency ecosystem.This influence of Asian countries on the cryptocurrency industry is associated with a high proportion of their participation in the cryptocurrency market.

Prospects for long-term traders

Netcoins CEO Michael Vogel told CCN that Asian countries were the first who started to use cryptocurrency, and it is often the reason that bad news from Asia (or rather, their negative perception) causing panic selling in other parts of the world.

“We have seen this situation several times, but it is important not to forget about the paradox of the cryptocurrency market, bitcoin has broken all price records a few months later, after China announced its unwillingness to recognize it as a means of payment,” said Vogel.

Vogel believes that the recent decline in the value of bitcoin is evidence of long-term trends. It reminds about the volatility of the cryptocurrency, which is a great opportunity for long-term traders to buy bitcoin at competitive prices.

A natural phenomenon

President Blockchain TV Jason Cassidy explains that, as the market capitalization of crypto-currencies grows, the market reaction, similar to the recent drop in the exchange rate are quite natural. He noted that such a reaction, regardless of the reasons for the decline, gives an opportunity for the market to “break” between the injections of hundreds of billions of dollars, leading to ultra-fast pace of the market capitalization.

With regard to the impact of Asian countries on the markets of cryptocurrencies Cassidy said

“Currently, the East focuses a significant amount of world trade, so China is having and will continue to influence world markets. Usually, the popular cryptocurrency recover faster, and have better prospects in the future. Such fluctuations in the market can also serve as a catalyst for the end of the life cycle of low-value coins or make them the object of fraud. An example of this is Bitconnect. Soon we will witness a reduction of wasteful investment in the cryptocurrency market, as the overall IQ in that region increases”.

“Shake-up” of the industry

New projects in the field of crypto-currencies, especially in Asia, are also affected by this development. New projects should be developed by professionals and have a sufficient resource base to survive, especially after controversial statements of the authorities on the need to regulate cryptocurrency market, which introduces further uncertainty.

Such situations help to separate promising projects from “paper”, which provide the industry a bad reputation. Relevant departments should promptly to create certain conditions in order to avoid such uncertainties in the market, which lead to a panic in the entire ecosystem.

These recurring events have shown how significant the influence of Asian countries on the blockchain industry. Due to the early introduction of technology and natural factors, such as the population, which in turn affects the market size, the region occupies a prominent place in the industry. No one knows how long it will last, but the ability of Asian countries in the cryptocurrency industry can not be ignored.

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