The crypto space has entered a nuclear bear market. The definition of a nuclear bear market is that when everything finally seems peaceful and a bottom is in place, a nuclear bomb goes off and the market’s bottom falls out.
For a long time traders, experts, and crypto enthusiasts thought the absolute bottom price for Bitcoin was around USD 5,800 per Bitcoin, or a total crypto market cap around USD 200 billion. As of this writing on 19 November 2018 the crypto market is going straight down. Bitcoin is at USD 4,700, corresponding to a USD 82 billion market cap, and the overall crypto market cap is at USD 162 billion. In the past day 2 weeks USD 60 billion has been liquidated out of the crypto market cap.
The decline in Bitcoin’s price was initiated by the Bitcoin Cash hard fork, which left us with Bitcoin Cash SV and Bitcoin Cash ABC, who are aggressively fighting each other and succeeding in making both forks like stupid. This could be the death knell for Bitcoin Cash, it has lost 50% of its value since the fork happened and is dropping sharply each and every day. The collapse of Bitcoin Cash, a cryptocurrency that used to have a USD 10+ billion market cap, is big enough news in itself, but it seems like it destabilized the entire market. It is likely the mainstream media reported that Bitcoin itself was forking, which caused people to sell Bitcoins. Beyond this, investors now realize how vulnerable altcoins are to community battles and forks.
The nuclear bear market really went into effect when the SEC issued its first civil penalties for the initial coin offerings (ICOs) Paragon (PRG) and Airfox (AIR). The SEC said investors could get their original investments back, which would certainly bankrupt those companies. The SEC says this will be their model going forward. PRG and AIR launched way back in 2017, meaning ICOs that occurred in 2017 and 2018, which is practically all of them, are at risk of being destroyed by SEC enforcement.
This is causing a broad price collapse across ICO cryptocurrencies. Ethereum is being hit particularly hard, since most ICOs use Ethereum’s ERC-20 protocol, and run on the the Ethereum blockchain. Users and investors are evacuating Ethereum right now, with its current price at USD 150 and dropping, after being USD 1,400 earlier in 2018. For most of 2018 Ethereum was the #2 crypto by market cap, but now it is USD 5 billion behind Ripple (XRP). It seems possible that Ethereum will transition from being a top cryptocurrency to just another altcoin.
Most of the top ERC-20 tokens, like OmiseGO, Maker, 0x, Basic Attention Token, Aeternity, Zilliqa, Augur, Golem, etc. are down 20% or more. These are all ICOs, and at risk of SEC enforcement. The SEC has the jurisdiction to attack ICOs retroactively, meaning ICOs that launched before the SEC announcement regarding ICOs being securities in 2017. As far as the SEC is concerned, securities are securities, no matter when they launched.
The nuclear bear market is impacting all major cryptocurrencies, not just ICO tokens, with Litecoin, Dash, EOS, Monero, and Zcash down 10-20%. Overall the trend is that investors, traders, and enthusiasts across the space are dumping as fast as they can.
GenesisBlockNews believes this nuclear bear market is the inevitable end result of the ICO contagion which has contaminated the entire crypto space. Most investors have lost money on ICOs, scaring them away from the space. It might be bad now, but ultimately the crypto space will be healthier once the ICO market fully collapses, since then the focus will shift back towards Bitcoin, the real king of decentralized money.