The cryptocurrency market has been highly unstable from the past couple of days. Bitcoin price fell from near $3,000 levels ($2,980 to be exact) to $2,120 levels (on Bitstamp) – a fall of nearly 30 percent. Ether price fell from an all-time high of $417 levels to $216.51 levels (BTC-e) – a fall of around 48 percent.
With these price drops, the total valuation of the cryptocurrency market has fallen towards the $100 billion mark. However, industry experts do not view the current instability as something to be concerned about and believe the market to pick up.
"It's only natural there will be a correction. Bitcoin increased 400% and Ethereum increased 4000% in only six months. When you compare it to the average return of the S&P 500 at 7%, institutions that decided to take a position in cryptocurrencies probably over performed on their annual funds. Regardless of how long this correction lasts, the early cryptocurrency investors believe in the long term potential in this space and it will only continue to increase”, CEO of CakeCodes Simon Yu said.
Similar views were echoed by Charles Hayter, co-founder and CEO of CryptoCompare, when he said that the recent plunge underscored how hype had impacted the markets of late. He said that investors entering the cryptocurrency space did not know "what they were getting into", CoinDesk reported. Hayter said:
"A correction of sorts was [in] the cards."
Bitcoin and ether prices now seem to have resumed their upward movement and have partially reversed their losses. BTC/USD is currently trading at 2569 levels, and ETH/USD is trading at 310 levels at the time of writing.
Aragon Co-Founder Luis Cuende believes that with the growth in the utility of cryptocurrencies and tokens, there would be more stability in the prices of the major cryptocurrencies. Cuende said:
"There has been increasing stability along with the rise of value in the past year. The recent volatility in the value and total market cap of all cryptocurrencies is unfortunately still quite mundane. Large actors can still affect and even, to a certain degree, manipulate the markets. This usually causes a ripple-effect and others react by buying and selling.
“It has been great to see a big increase in the total market cap. To me this indicates that more and more people are getting interested and excited about the blockchain.
As the utility of the cryptocurrencies and tokens grows, we're gonna see more stability in the prices of the major cryptocurrencies. What I'm very much looking forward to is stablecoins. That, along with the rise of decentralized exchanges, will help bring stability to the field."
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