Today the combined market capitalisation of all cryptocurrencies fell from around $710 billion to just over $570 billion as of writing. It is the single biggest one day fall in absolute terms in the history of the crypto-currency markets.
I’m just going to point out the reasons for this and, afterwards, outline my own argument why this is not a serious concern for any serious market participant.
For Any Serious Investor, a $140 Billion “Market Massacre” is Not a Concern
There are two simple reasons for the market fall: i) second-rate journalists are writing two-bit articles which are purely intended to act as clickbait; ii) immature market participants are reading this drivel and panicking at the first signs of perceived trouble when, really, there isn’t any.
Here is an example of an article which is responsible for today’s run. It was published late yesterday by the Express which ran with the title “Bitcoin and Ethereum plummet as South Korea decides on total crypto shutdown.“
Anyone reading the title alone could be forgiven for thinking that Bitcoin and Ethereum had plummeted and South Korea had decided on a total crypto shutdown.
In reality, four days previous to the article write-up, the South Korean Justice minister had made mention of his intention to organise a bill to discuss the banning of cryptocurrencies. But for a entry-level journalist with a demanding editor looking for traffic, traffic, traffic, that represents the kind of material which can easily be racheted up to send out an entirely different message altogether – one designed to attract readers and serving no other purpose. There is likely no other real intention here – although I appreciate why some might see this as attempted sabotage on the crypto space.
I’m not going to dwell too much on that article, although I’m still intrigued how the journalist who wrote it could state that a $60 fall in Ethereum translates into its price falling off a cliff. On top of that, the journalist has put into public record a very different statement altogether in relation to his own professionalism, and not a very flattering one at that.
However, the general point that I am trying to make is that, for every one sensationalising journalist seeking to distort a news subject into something that brings in web traffic, there are a lot more immature crypto market participants that simply, for whatever reason, do not see through this.
Buying Coins for the Sake of Buying Coins
So, to cut to the chase, there are a lot of immature and very fickle participants in the crypto markets. They have jumped into the game because, for them, the game is simply about buying coins for the sake of buying coins because coins take off in value because that’s what coins do – or so they think. In a way, that becomes something of a self-fulfilling prophecy – although an extremely fragile one.
These people are real, they exist and their actions have tangible effects on the market. They are indifferent to the blockchain’s capabilities, the opportunities it offers for improvements within industry and commerce that are about to be revolutionised over the next few years by the technology.
They are even less concerned by performing research into the projects and tokens which end up taking their money. For the rest of us, however, none of this is of any concern. We choose to invest in an ICO because it represents a fantastic idea underpinned by a strong team with solid integrity and executing due diligence. In this scenario, two-bit journalists and naive investors are of no concern. A good project runs a tight ship that will weather any storm.