Crypto market rebound driven largely by speculators
The crypto crash that occurred over the past week has finally abated as keen-eyed traders jump on the rock-bottom prices in the hope of quick gains
When any market falls hard, a bounce back is inevitable. The only difference with crypto-currency markets is that the drops are usually harder and farther than the rallies.
The crypto crash that occurred over the past week has finally abated as traders snap up rock bottom priced digital currencies in the hope of a quick gain. The market climbed a little more than 6% on Wednesday, according to analytics website coinmarketcap.com, primarily spurred on by Bitcoin, which has gained a similar amount.
On Tuesday, markets crashed to a yearly low point, largely driven by Ethereum being dumped onto the market by blockchain projects that accumulated it earlier this year. It is only natural that after a big dip comes a rally in the ebb and flow of trading markets.
According to a Bloomberg report, Ethereum co-founder Joseph Lubin has attributed this to pure speculation. Echoing the sentiments of others, he said that the end of 2017 surge in crypto-currencies was a bubble and the ecosystem was stronger for it as things have returned to normality now.
“We’ve seen six big bubbles, each more epic than the previous one, and each bubble is astonishing when they’re happening, but when you look back they look like pimples on a chart,” Lubin said on Bloomberg Television. “With each of these bubbles we have a tremendous surge of activity and that’s what we’re seeing right now.”
Lubin is now the CEO of Consensys Inc, which helps blockchain startups build on top of the Ethereum platform. Developer activity has increased by two orders of magnitude since last year’s price spike which is why he is not concerned about the current market slump affecting the growth of the ecosystem and its adoption.
He added that traders were adding to the volatility and sees a future in which Ethereum will be a big player amongst hundreds of other protocols. “This is what it feels like to be living in exponential times,” he added.
Speculation has largely driven the pump and dump cycles that are so common with crypto-currencies, especially the smaller, lower market cap altcoins. Day traders, not specifically interested in the technology or its applications, are looking for a quick buck in an emerging market.
This is evident on most crypto coin charts that show massive swings in volume and volatility. For those holding on, or ‘hodling’ as the crypto community calls it, the long term prospects are much brighter.