The last few days have witnessed a sudden downfall of the most valuable digital currency i.e. Bitcoin. For the first time in the recent months, Bitcoin value fell below $30,000, down by over 50% as compared to $63,000 recorded in April 2021.
The Bloomberg Galaxy Crypto index was also got down 4%. One of the causes for this catastrophic downfall includes the recent crackdown of the China Banking Association(CBA) blaming increasing use of Bitcoins in illegal activities and high electrical energy usage in mining digital coins.
China once was the largest shareholder of the bitcoin market, but their participation is eventually reduced after the crackdown.
Bitcoin Price Crash: Big Picture
- The price of Bitcoin touched $29,333, reaching the same level where it was in December 2020.
- It is not the first time when the price of Bitcoin crashed so severely. Volatility has always been a part of the bitcoin experience. In the financial year of 2017 too, the price of Bitcoin tanked over 80%.
- The BTC fell to $29,667 as of 07:00 am in New York, which is about a 3.38% downfall in a single day.
- Traders suspect that anything below $30,000 could rattle the cryptocurrency market.
- There are 22.46 billion Bitcoins are available in the market.
- The Bitcoin price crash has caused the abrupt decline in the valuation of the 2nd largest coin Ether. It’s price fell by 5.6%.
- Most digital coins lost between 7% -22% of their valuation, and shares of Coinbase dropped to 5.4%.
- China banned financial and payment institutions from providing cryptocurrency services which adversely affected the crypto market globally.
- On May 12, 2021, Elon musk had suspended the purchase of Tesla cars via Bitcoin because of environment-related issues, and since then, the digital coin has been on a roller coaster ride.
- There were many rumours of IRS investigations into the largest crypto exchange – BINANCE- which weakened the traders’ resolution.
- For those who buy crypto on the methodology of ‘pump and dump‘, the ups and downs of the valuation are somewhat normal and nothing to be overly worried about.
- The market’s downfall is also beneficial for the new buyers for starting their career in the tremendous market of cryptocurrency.
Food For Thought
Although BTC has faced a massive decline in its price, in the last 24 hours, BTC touched an intraday high of $40,000 and a low of $30,000. It is still over 200% up from September 2020 and 27% so far this year. The trend shows the great potential that exists in the cryptocurrency market.
With the downfall of Bitcoin, a large number of investors are adversely affected. Still, many believe that bitcoin can withstand this declination and emerge again to new significant heights. In long-tem investment, it will ultimately be going to profit the buyers.