Nowadays, there are a lot of talks about a potential crash of cryptocurrencies. The truth is, a crash of this kind can be triggered by a few reasons. Today we will only stick to two that are seen as potential ones if things go bad.
The broad opinion on why many of the big cryptocurrencies went down is the decisions of the Chinese government and most recently South Korea made many investors back off. This is not something we haven’t already seen since China has caused big drops in the past for example when the People’s Bank of China banned all payment companies to work with Bitcoin exchanges.
Also, China banned ICO’s and went on to shut down all crypto exchanges, but despite this, the market diversified and luckily recovered in a relatively short time.
Another thing for a potential crash can be more and more sophisticated investors show interest in cryptocurrencies and they tend to use new and complex tools and methods that affect the price so new investors don’t find this appealing. This can also lead to market overload and create bubble-like conditions.
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