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Bitcoin Price Plunge: Is The Crypto Bubble About To Burst?

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Bitcoin price plunge

Bitcoin Price Plunge: Is The Crypto Bubble About To Burst?

The recent bitcoin price plunge was the most significant dip since March last year. The question in the mind of most traders is if the crypto bubble is about to burst. According to Bloomberg, a steep selloff in Bitcoin raises concerns that the crypto bubble may be about to burst. This is one thing bitcoin holders and crypto traders dread to see. In the past 48 hours, bitcoin slid as much as 26% in the biggest 2-day dip since March 2020.

Bitcoin price plunge

Since Friday (January 8, 2021), bitcoin has wiped out almost $185 billion in value. This is more than the market capitalization of 90% of individual companies in the S & P 500. You can get the picture now. Crypto analysts are yet to determine whether this is the beginning of a larger correction. Meanwhile, we have seen this parabola break, so it might just be the start of a larger correction.

Also Related: How crypto AML Software will improve compliance in banks

During the past year, especially in December, the bitcoin experienced an unprecedented bullish run. The movement evoked memories of the 2017 mania that first made digital currency a household name. Also, the price crashed just as quickly as it skyrocketed. On January 8, the price of bitcoin almost reached $42 000. In that bullish run, retail traders and Wallstreet investors were clamoring for a piece of the action.

Matt Maley, the chief market strategist at Miller Tabak + Co, highlighted that the bitcoin’s bullish run was a parabolic move. The question we all need to answer is this, “what happens with all parabolic moves?” You will experience severe corrections. Although bitcoin price plunge is currently “shaking” the market, it will still rise higher in the long-term. But it will still experience more corrections along the way.

Is It Time To Take Some Money Of The Table?

As retail traders and crypto investors bemoan the recent bitcoin price plunge, Scot Minerd said, “Time to make some money off the table.” Minerd is the Chief Investment Officer with Guggenheim Investment. Meanwhile, in late December 2020, Minerd predicted that bitcoin’s price eventually reaches %400 000.

Bitcoin’s true believers and cryptocurrency enthusiasts argue that the current bitcoin price crash is different boom-bust cycles.

Their reason is that the asset has matured as a result of the entry of institutional investors. Therefore, they believe the asset is increasingly seen as a legitimate hedge against dollar weakness and inflation risk. Meanwhile, others worry that the bitcoin rally is untethered from reason and driven by vast swathes of fiscal and monetary stimulus. This last group of people argues that bitcoin is unlikely to serve as a viable currency alternative.

As many investors move to enrich themselves on Bitcoin, the asset has begun to draw regulators’ attention. UK’s Financial Conduct Authority (FCA) has warned that investing in crypto assets or investments linked to them are high risk. The FCA’s concerns include price volatility, the complexity of the product offered, and the lack of consumer protection regulation.

Why Do We Get Extreme Bitcoin Price Plunge?

Many factors influence the extreme bitcoin price crash. Although there is no clear industry consensus on the reasons, there are plenty of suspects to look into. Here are some of the worthy mentions to consider as bitcoin price fall from grace:

  • Crypto (Bitcoin) whales

According to Bloomberg, about 2% of the total bitcoin holders own at least 90% of the total coin available. These big bitcoin holders are known as “whales” in the crypto space. CryptoQuant CEO Ki-Young Ju said the reason for the bitcoin price plunge is partly because crypto whales started making large deposits of their bitcoin holdings to exchanges to cash in on bitcoin record highs. This is exactly the same scenario that played out in the 2017 bull run. Whales contributed to a significant shift in crypto’s value just by moving their assets to other platforms. According to the blockchain analytics firm, IntoTheBlock, whales uploaded 93,630 BTC in different exchanges. The amount totaled more than $1.6 billion.

  • Just a healthy pullback

Many people, especially bitcoin lovers, believe that the current bitcoin price plunge was to be expected. They see it as a good thing to allow bitcoin to let out a bit of steam before skyrocketing to dramatic new heights. The argument is logical but vague since there is little data to support such a claim.

  • Regulatory uncertainty 

The United States regulators have always had a dysfunctional love-hate relationship with crypto assets. SEC’s recent court case with Ripple should ring a bell and serve as a souvenir to those in doubt. The recent news shows that the U. S. Treasury Department wants to implement a mechanism that empowers them crypto wallets of users. Such new will undoubtedly trigger some sell-offs.

  • Fear on the part of traders and investors 

You shouldn’t underestimate the impact of the average trader. There is certainly a large group of battle-hardened bitcoin investors and holders who still carry the 2018 crypto winter scars. They have been waiting patiently to recoup their losses or at least have a second chance at redemption. Such people were only waiting to sell their BTC at record high prices.

Also read: Top Bitcoin hardware wallets: a comprehensive list

Today, bitcoin is anybody’s game, and savvy investors are aware of this. Therefore, when the price dips suddenly, nerves get frayed, and sell buttons are clicked. Many bitcoin holders may propagate the crypto’s unstoppable rise; they may not be so optimistic in private. All remember the saying, “buy the rumor, and sell the news.”

  • Derivatives trading 

The recent drop in bitcoin price has been accompanied by a large liquidation of multiple derivative positions. The amount almost hit $2 billion, and this led to “market overheating.” It means that the value of perpetual contracts has become greater than the value of bitcoin.

We have sophisticated trading and institutional products like Futures, leveraged margin trades, and decentralized finance protocol. The implication is that a little slide in bitcoin’s price can initiate a chain reaction by trading bits. This can lead to an abrupt oversupply of BTC and a further crash in price.

Conclusion 

The recent bitcoin price plunge proves the high volatility of the crypto market. Therefore, before you decide to hold new positions or exit existing ones, take your time to study the market. You need to understand that there are many stakeholders, and each plays a significant role in bitcoin’s price movement.

 

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Top 10 Blockchain Startups in Nigeria 2020

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Over the years, modern technology has been dominated by companies based in first world countries. However, technological resources shouldn’t be located exclusively to a minute part of the world. In reality, the possibility of technology invading every sphere of human endeavor with its potentials can only be achieved when tech resources are distributed globally, as well as their use in helping local populations who are already showing a degree of commitment to improving their developing communities. More so is the advantage of knowing which of the crypto companies to invest in and how. With this list of the top 10 Blockchain Startups in Nigeria 2020, you can never be wrong in your choices!

In Nigeria, Africa’s largest economy, a number of blockchain startups are growing to meet the need for a cryptocurrency-thirsty populace. This is regardless of the fact that cryptocurrencies are not yet accepted legal tender in the West African country. Between April and June this year (2020) alone, $34.4 m was transacted in Bitcoin in Nigeria, the largest share on the continent. As stated by Usefultulips, South Africa followed behind with $15.2 m; Kenya with $7.8 m; Ghana, $ 640,000 and Tanzania $600,000.

It should not be alarming, therefore, that useful platforms through which cryptocurrencies are traded are springing up in handful places around the country.

Of all these platforms, I bring to you those that I consider the top 10 of Blockchain startups in Nigeria. See them below:

Top 10 Blockchain Startups in Nigeria 2020

(1) Quidax

Co-founded in 2016 by Uzo Awilli and Buchi Okoro, Quidax allows its users to freely purchase as well as sell cryptos in their local currency. Trading in Ethereum, Ripple, Bitcoin, Litecoin alongside other cyptocurrencies can be easily done on Quidax.

(2) BuyCoins

Provided by Bitkoin Africa, BuyCoins was founded in 2017 by Timi Ajiboye, Tomiwa Lasebikan and Ire Aderinokun. BuyCoins has a funding of $120,000. Users on BuyCoins have the opportunity to buy and sell cyrptocurrencies within a very short range of time.

BuyCoins conduct their services via their app, taking off prospective traders the stress of seeking other traders in the crptocurrency market. BuyCoin supports Bitcoin Cash, Litecoin, Bitcoin and Ethereum. Cryptos can be traded via their app which is available for IOS and Android devices.

(3) Bundle

Bundle is provided by and backed by Binance and was founded by Yele Bademosi. With Bundle, users can sell or buy Ethereum, Bitcoin and BNB. They also offer their customers the opportunity to buy cryptocurrencies using bank or card transfer. Proceeds from sales of cryptos, could also be withdrawn and deposited into your commercial bank account. With just N500, you can trade in BNB or Bitcoin.

(4) Yellowcard

Yellowcard provides users services for purchasing cryptos via the internet through debit cards or bank transfer. With this, they (users) can load their back accounts in the local currency, before paying for the digital coins they’re interested in. Currently, Yellowcard is in support of dash and Bitcoin core and would be adding tether (USDT) and Bitcoin cash (BCH) in the days ahead. Yellowcard is founded by Chris Maurice

(5) Patricia

With a dynamic operating mode, Patricia makes trading in cryptos like Ethereum, discounted gift cards, Bitcoin, Perfect money, etc. easily available to prospects.

(6) ABiT Network

Founded by Gauis Chibueze (aka Bitcoin Chief), ABiT Network provides blockchain e-commerce services throughout Africa. Some of ABiT’s products include ABiT Play, ABiT Go, ABiT Farm, ABiT Reps, ABiTCrowd, ABiTrader, and Tatcoin. For instance, with ABiT Reps, ABiT offers youths the opportunity to earn by telling others about ABiT products. Their apps can be found on different online stores such as Android and IOS.

Top 10 Blockchain Startups in Nigeria 2020

(7) CryptoTvPlus

CryptoTvPlus is one of the leading media agency on the continent. They provide the latest info on events, updates, project reviews in the digital currency market. They have an active online presence on Facebook, Twitter and YouTube with an application for easy access on Google play store. Founded in 2018, Cryptotvplus has a revenue of $ 15.40 million.

(8) Bitfxt

Bitfxt is another Nigerian cryptocurrency startup. Recently, in February 2020, they secured N5.45 billion from UK-based Payitup clearinghouse Ltd in a bid to expand their cytocurrency infrastructure. Traditionally, Bitfxt deals in Bitcoin and allows trade from prospects all around the globe.

(9) Roqqu

Founded by Uchenna Nnodim, Roqqu provides a speedy platform for the buying and/or selling of cryptocurrencies. Within thirty minutes, withdrawals are completed using Roqqu. They support EOS, STEEM, Ethereum and Bitcoin transactions. Like other cryptocurrency trading platforms, Roqqu has an app on Google Play store for easy trading. Traders on Roqqu are referred to as Roqquians.

(10) NairaEx

Founded in 2015, NairaEx has recorded over hundred thousand users with over one million transactions. They are one of the most popular in the digital currency market on the continent. NairaEx is a top blockchain company in Nigeria where cryptocurrencies such as Litecoin, Bitcoin Cash, Ethereum, and Bitcoin are traded. They are a reliable company for the exchange of Bitcoin and other cyptos through common payment platforms. NairaEx allows users to fund and withdraw within the same day.

11.Conclusion

The majority of the blockchain companies mentioned and discussed in this piece and others not mentioned here are founded and spearheaded by young Nigerians. These are highly spirited individuals who are seeking novel solutions to ancient problems in their immediate environment.

Ranging from agriculture, to the energy sectors and the financial payments service industries, these startups are making life better for many. You should find a way and align with the current trend. There is something for you if you invest in cryptocurrency today.

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