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The Game Isn't Over Yet For Bitcoin, Ethereum, Ripple And Litecoin

Is this correction warranted? Probably so.

The big questions, of course, are why the correction occurred in the first place and whether it was warranted.

Though there are next to no certainties with virtual currencies, the move lower appears to be tied to four catalysts. This includes South Korea flip-flopping on a potential domestic cryptocurrency exchange crackdown, China getting stricter with virtual-currency trading, stop-loss orders triggering and creating a cascade to the downside, and retail investors wearing their emotions on their sleeves.

As for the second question, though I might be in the minority, my opinion is that this correction was most definitely warranted.

evolution of blockchain technology. Blockchain is the digital and decentralized ledger tethered to virtual coins that logs all transactions." data-reactid="80">If we look at the primary catalysts for bitcoin, Ethereum, Ripple, and Litecoin, it's been the evolution of blockchain technology. Blockchain is the digital and decentralized ledger tethered to virtual coins that logs all transactions.

View photos
A man looking at a digital encrypted blockchain on a screen.

Image source: Getty Images.

The possibilities with blockchain appear endless, at least for the time being. Its use is particularly attractive for financial service companies that currently deal with settlement times of up to three to five days on cross-border transactions. Blockchain resolves this by pushing settlement and validation times down to mere seconds in some cases, while also potentially lowering transaction fees by eliminating the middleman (banks usually act as a third-party in transactions).

However, blockchain technology is no lock to be accepted with open arms by enterprises. This is a technology that bitcoin brought into the limelight almost a decade ago, and it's taken that long just for it to be tested in small-scale projects. Plus, there aren't any guarantees that blockchain technology will be remotely compatible with current payment networks, which could require an expensive and time-consuming infrastructure overhaul should financial service companies jump aboard.

notorious for overestimating just how quickly new technology will be adopted. This isn't to say that blockchain technology can't be the game changer that everyone expects so much as to suggest that it's probably going to take longer for it to become a mainstream solution for big businesses. If that is indeed the case, then this recent correction in cryptocurrencies could be well warranted." data-reactid="104">If history has proven anything, it's that investors are notorious for overestimating just how quickly new technology will be adopted. This isn't to say that blockchain technology can't be the game changer that everyone expects so much as to suggest that it's probably going to take longer for it to become a mainstream solution for big businesses. If that is indeed the case, then this recent correction in cryptocurrencies could be well warranted.

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Sean Williams has no position in any of the stocks or cryptocurrencies mentioned. The Motley Fool owns shares of and recommends Nvidia. The Motley Fool has a disclosure policy.

Source : https://finance.yahoo.com/news/putting-plunge-bitcoin-ethereum-ripple-153900188.html

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