Since the beginning of the year, the entire crypto market is declining. The market cap is currently standing at a total of $200 billion leaving behind the high place of standing behind the $800 billion.
A lot of experts are trying to find the reason behind this behavior on the market and they believe that one of the reasons might be that retail investors contributed for the growth in percentage in the total market cap of 2017. Jonathan Cheesman, a partner at a company named Distributed Global explained that getting rich quickly was the inflow was the largest inflow in 2017 and that led to the growth of the total market cap in only 3 months. However, FOMO played a huge role. Institutional investors, on the other hand, refused to enter the market because of regulatory uncertainty. Despite this being the case, most of the capital inflow comes from investors such as these we mentioned above.
Capital leaks are also a further pressure on the prices. Distributed Global says that mining is the most persistent source of PoW but miners sales can’t really be predicted. Exchange fees are a big inflow as well because the commission that exchanges charge is taken in crypto but there is no data of how much is actually sold for a fiat currency.
Another factor can be the taxes. Negative cash flow for these taxes is supposedly a barrier for retail investors. Finally, ICOs raised more than $12 billion at the start of the year but big projects such as EOS and TEZOS covering all the demand for ETH need to be met by a utility.
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