Bitcoin Rate Starts Dropping: Why Do Crypto Exchanges Shut Down?
Regardless to optimistic claims of crypto currency enthusiasts, the main cryptocurrency cheapens again. On Thursday, January, 29th its rate decreased to $3450 and keeps cheapening. Many experts believe that its depreciation won’t stop because this cryptocurrency loses investors’ interest rapidly.
Chicago Board Options Exchange’s withdrawal of application for Bitcoin ETF turned out to be a red flag for cryptocurrency market. Bitcoin ETF should have been using bitcoin as a basic asset to buy cryptocurrency and sell its shares to investors. Thus, the holders would be able to make profit on changes in bitcoin rate but they would not work with Bitcoin directly, so that their assets would be protected. Such a mechanism should solve one of the main problems of the cryptocurrency market: disappearance of digital money after hacker attacks. It is worth noting that Bitcoin-ETF should have become a new financial tool and attract major investors to the cryptocurrency market. However, it did not come true.
The situation caused panic. According to the experts, Bitcoin will probably keep cheapening and make the cryptocurrency market follow it. Bitcoin may drop to $2800 in the near future.
It is worth nothing that Liqui exchange announced its shut down recently, saying that there are no economical sense and there is not opportunity to ensure liquidity. The exchange representatives warned the clients that they had 30 days to withdraw the funds. The platform does not guarantee that it will support the site for longer period of time. The exchange was created in 2016. However, it was hacked in the summer of 2017.
In the current situation the question is what assets investors prefer to invest their money in after leaving the cryptocurrency market. As VanEck Associates CEO thinks, Bitcoin loses its popularity and investors pay more and more attention to gold. The demand for a precious metal decreased in 2017 because of high level of interest to bitcoin, but the situation changes now: according to the survey, investors consider gold as a promising investment direction in 2019.