Crypto meltdown, the Upbit situation and Mt. Gox FUD
A crypto meltdown is well underway amid news of an investigation by South Korean regulators of Upbit, a leading exchange. Extremely large losses are being seen across altcoins as some recent high flyers are being absolutely destroyed. Seven of the Top Ten coins in the world are down more than 15%. That's a beatdown of high magnitude.
Upbit is reportedly being investigated for a series of fraud charges and for "cooking their books", or fictitiously altering their balance sheet. As news of the impending charges spread, investors apparently began selling alt-coins to get money out of harms' way. And the route accelerated. It's hard to overstate how important South Korea is to the entire crypto universe. According to estimates, less than 1 in 20 Americans own cryptos; in South Korea it's 1 in 3. If Korean regulators want to ruin the party, they may be able to - albeit temporarily. Widespread, dead-of-the-night crypto raids create fear among investors as a "sell first, ask questions later" approach becomes the dominant mindset. Is this is buying opportunity? Probably. But then again, if arrests and raids become the norm and not an exception, it's impossible to know where the bottom comes in.
It’s important to note, however, that having records seized doesn’t mean Upbit has done anything wrong, it doesn’t mean funds are at risk, and it doesn’t mean that Korea is banning crypto.
Mt. Gox: over the last day, we’ve seen many opinions that Bitcoin’s tanking is caused by another sell off from the Mt Gox wallet. Indeed, the wallet has sent over 8,000 bitcoins over the last day. But do not fall for that blindly - we don't know if those Bitcoin have actually been sold. You need to know that when one tries to sell that many Bitcoin, they don’t just log onto an exchange to sell immediately filling any order. Usually, they use different software or aid of OTC buyers which takes a lot of time and effort.
It's more likely that simply moving the coins has caused more of a market reaction than actually selling them would. Try not to get too caught up in the recurring Mt Gox FUD - it has happened before in January 2018 and had nothing to do with the market plummeting.
Like all accounts of fear, uncertainty, and doubt, we suggest taking a calm approach to what has unfolded, in that news such as this typically blows over in a day or two. The Bitcoin Bravado team feels this is a perfect time to pull from its reserves to cost average into several projects.
Keep your head up - Concensus 2018 is just around the corner which may turn things around like last year.
Stay tuned to CryptoMedics for some fresh crypto medicine!
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