The cryptocurrency trend has moved well beyond the hype and into the realm of long-term popularity. Once you have thoroughly understood the difference between cryptocurrency and blockchain, making an investment is well worth your while if you have an appetite for risk. However, all is not rosy in the cryptocurrency world, as traders have been taking a bad hit with several coins that have fluctuated wildly up and down. If you are wondering why the cryptocurrency is falling today, read this quick guide on why the cryptocurrency market is going down.
- Decreasing demand
Despite the huge hype about cryptocurrency, the simplest answer to why the cryptocurrency is down is that people don’t necessarily want it that much anymore. Many traders who are already working on some cryptocurrency projects are not interested in new ones, especially the ones that are merely rip-offs of existing ones. In addition, hacking attempts such as a recent incident in South Korea has reduced the popularity of crypto over security concerns.
- Frozen assets
Some cryptocurrency projects simply block crypto user wallets for what they deem as suspicious activities. These blocks may happen at random and without notifying the user which has resulted in many others opting out of the cryptocurrency project. This is what happened with EOS, which froze 27 wallets on a single day and resulted in a huge number of exits from others.
- Hacking attempts
Security concerns have always existed with online assets, and hackers have found a new target in cryptocurrency. Typical weaknesses like poor password strength have made it easy for hackers to hack into cryptocurrency exchanges such as Coinrail and BitFlyer. These incidents have been a wake-up call for all sorts of cryptocurrency developers, who are now busy going over their projects and analyzing the loopholes and weaknesses. In the process, however, several of the cryptocurrencies have been shut down till further notice, which has reduced the public’s confidence in cryptocurrency as a worthy investment.
- Government activity
The essence of cryptocurrency is that it is decentralized – however, several governments are not happy about keeping it so. US authorities are increasingly calling out cryptocurrency exchanges and asking them to provide data for inspection, citing reasons such as detected fraud. Such moves indicate that cryptocurrency may be on its way towards a centralized regime, which is scaring off many traders and potential investors and might bring in massive drops in cryptocurrency prices.