Several Cryptocurrency Investors Cashed Out In April After Freaking Out
One of the best ways of change between fiat currency and cryptocurrency is by making use of the cryptocurrency exchanges. Many a times, users buy cryptocurrencies instead of changing it to cash. However, April came with a bag of surprises for Coinbase. This is because many users changed their cryptocurrencies to cash.
In most cases, investors will always exchange their holdings to fiat currency. This is usually the case when the cryptocurrency industry faces challenges. Due to the fact that 2018 has been a bullish year, there has been a minimal desire for people to purchase Bitcoin or altcoins. Many people prefer to pursue short-range proceeds first. However, for the past couple of months, such prospects have proved elusive.
A Decline In The Trading Volume
This apprehensive state of affairs has resulted in a number of impacts. First and foremost, the daily cryptocurrency trading volume has been negatively affected, with a decline being registered. The trading volume has declined to approximately $15 billion each day, down from $40+ billion which were being traded a couple years ago.
Secondly, it ought to be noted that there are a few virtual currency investors who are continuing to hold on to their assets. Instead of expanding their portfolios, most investors have in the recent past preferred to grow their crypto-to-fiat exchanges. This was evident in the Coinbase exchange, where the company saw a flight of money out of the platform especially in the month of April. There were fewer deposits compared to previous months.
In as much as it is not unusual for exchanges to realize more money moving out in comparison to funds coming in, it is not a common occurrence in the cryptocurrency industry. The experiences at Coinbase is a clear indication that April appears to have been a breaking point for the virtual assets, even though the status quo has not registered any improvements.
By and large, prices of many cryptocurrencies have continued to be low, with others being seen to fall. In many ways, this is likely to lead to more investors completely withdrawing their investments out of exchanges in the near future.
Superior Forms Of Money
Over and above, it is likely that this was just an isolated incident. It has however led to an element of nervousness in the world of cryptocurrency. Many people are of the perception that Bitcoins and Altcoins are greater forms of funds when compared to fiat currencies like the US dollar.
The occurrences in April indicated that the scales seemed to have tilted in favor of the fiat moneys. This is not really a good sign, though one should also bear in mind that this is just a research carried out by Chime, and was based on a minute number of Coinbase users.
Evidently, the bearish cryptocurrency markets has resulted in a number of investors being uneasy. Most of such investors only came to learn about the cryptocurrencies when some of the cryptos saw a rise in prices. In spite of the current state of affairs, there is a likelihood that the cryptocurrency market will turn around again in the near future.