Bitcoin‘s most recent plummet is all over the cryptocurrency market news. Rightly so – the token is suffering its lowest point this year, and it looks as though the prices just keep slipping down. Subsequently, most other tokens, such as Ethereum, Ripple, EOS, and Bitcoin Cash are seeing red too.
This sounds like bad news – red is not a color well suited to profit – but it might yield a long-term benefit. According to several cryptocurrency analysts, Bitcoin plummeting might result in an over-all healthier market.
Travis Kling, the CIO at Ikigai – a crypto-assets management firm – strongly believes that this is a prime time to let go of those who are in the market for the wrong reasons. His “let em go“ came in the form of a tweet following Bitcoin’s decline:
This BTC break is good for the space.
Should induce more capitulation in down-market cap names which we have to see to get on better footing for a recovery.
BTC holding in was giving folks hope to hold on to their shitcoin bags for a broad-based pump that won’t come. Let em go.
— Travis Kling (@Travis_Kling) November 14, 2018
Lower trading altcoins are taking a knock too, which Bitcoin advocates – such as Kling – believe is ultimately good as it will trim away the tokens which might be clogging the market and holding it back. Also encouraging the market while it’s down is Brian Armstrong, the CEO of major cryptocurrency trade exchange Coinbase, who thinks that a decline in the market is good to eradicate the “hype” and weed out the less-committed investors saying:
“When there is hype, people are irrationally exuberant. When there is despair, people are irrationally pessimistic. Neither is true. Reality is always somewhere in the middle, more correlated with real usage (transactions per day) than the price. After many years of this, I’ve come to enjoy the down cycles in crypto prices more. It gets rid of the people who are in it for the wrong reasons, and it gives us an opportunity to keep making progress while everyone else gets distracted. We use the down cycles to build a strong foundation so we can thrive in the next growth cycle”.
Furthermore, the red market generally removes flakey investors and it could also lead to less scams that the industry faces. This is because the firm investors who remain are oft more skeptical of shaky projects than the pump-and-dump investors and are therefore less likely to plug their assets into what might be a scam.