Crypto assets’ capitalization dropped below $200 billion in August 2018. Slightly less than a year ago, it exceeded $822.5 billion. This resulted in crypto economy fans’ confidence gradually waning along with the price of bitcoin.
The Beginning
Mark Zuckerberg, the CEO of Facebook, was the first to silently declare war on digital currencies. The social network giant started tightening its rules for placing ads for ICO projects and other crypto industry representatives.
Google and Twitter soon followed Zuckerberg’s lead. This advertising isolation rapidly caused the price of Ripple, Ethereum, Bitcoin and many other popular assets to decline.
Not All Hope Is Lost
Investors started selling the cryptocurrencies they had bought. Bitcoin’s price collapsed to $10 000, then $9 000, and is now trying to stay around $6 000.
These circumstances forced traders to try and find a reasonable entry point by using forecasts made by well-known representatives in the industry. Analysts also used dozens of different tools to forecast future prices.
As most crypto exchanges don’t have the mechanism that allows traders to go short, they are only left with one direction to trade in.
As they are not able to go short, traders and investors were united by the desire to see the bitcoin price growing up to $20 000 again. The market is however unfortunately not on their side. The $ 622.5 billion drop in capitalization is an approximation of the amount of losses that investors have suffered and continue to incur.
New Possibilities
The desire of governments to regulate cryptocurrencies has led to tougher legislation, and this resulted in a decline in the popularity of digital coins. The number of transactions on blockchain networks has dropped by more than 50%, and nobody remembers the prediction that a bitcoin would cost $1 million.
Traders are however still watching the charts and this is due to the volatility of cryptocurrencies still being very high. Crypto asset prices can often grow or decrease by between 5% and 10% in a single day.
Making Profits on an Asset’s Price Decreasing
With this background, traders should be able to make profits not only when the asset grows, but also when it declines. On the Olymp Trade Forex platform, traders can do this by opening short positions.
A short trade, also known as going short, or a short sale, is selling an asset that does not belong to the seller. The asset is in fact borrowed from the broker or stock exchange for a while. The asset is returned to the lender when the position is closed.
Our platform allows traders to go either long or short when trading digital assets. Since the asset is not physical delivered, no crypto wallets are needed.