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There seems to be consensus in crypto circles that the Coinrail hack where $40 million worth of tokens were lost, is the reason for the huge selloff in the market right now. At the moment, bitcoin down by close to 10%, with some altcoins losing up to 15% of their value. While the Coinrail explanation looks plausible, it probably isn’t the reason why the market has dropped so hard. Here’s why you should be skeptical of this popular explanation.

First, Coinrail is a very small exchange for it to have such a massive impact on the crypto market. Most people didn’t even know of its existence before yesterday’s news. As such, for it to have such an impact, if it is the reason, then the crypto market is a fundamentally weak market, and not ripe for huge investments. No one would be putting big money in a market that can lose 10% of its value simply because of some irrelevant market occurrence.

Second, the market has been pretty much stagnant for the last couple of months, despite so much good news coming out. In the last few months, we have seen some cryptos pretty much go mainstream in terms of adoption. Ripple (XRP), Vechain (VEN) and ICON (ICX) have been adopted by entire industries yet their prices haven’t moved one bit.   Volumes across the market have been quite low too, despite all these good news. This is a disconnect that invalidates the idea that it’s Coinrail that has caused the market to drop. If big news can’t drive up the market, then small amounts of bad news shouldn’t crash it either.

So what could have caused this drop? The most probable reason is that manipulators are dumping coins to protect themselves from investigations by U.S authorities.  Last week, news emerged that the CFTC requested for comprehensive trading data from several major exchanges. It also emerged that these exchanges have been reluctant to provide this data. This can only mean one thing, market manipulation has been happening and the manipulators are now feeling cornered. As such, they could have moved to dump their coins, to kill any traces of their activities.  Since volumes were low all through last week, such a dump would affect prices, and that is probably what we are dealing with right now.

If this is the case, then this drop is great for crypto investors. That’s because it would mean that we are headed closer to the end of blatant market manipulation in cryptocurrencies. Once that happens, and proper regulations enter the market, crypto is likely to moon.  There is so much happening that a rally is almost investable. This also makes current prices great for someone looking to buy crypto with a long-term view in mind. Bitcoin could shoot above $10,000 in the near future, and pull the rest of the crypto market with it. The next few weeks will be interesting for cryptocurrencies, that’s for sure.


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