Bitcoin experienced the most significant price drop in the last 15 months this month. The cryptocurrency price has been down more than $3,000 since yesterday. Many experts are puzzled about the sudden decrease in the value of bitcoin. Check how a restaurant can take bitcoin payments.
On Tuesday, January 16, the dropping continued with the rate slump below $10,000, making bitcoin lose more than $3,000 in 24 hours. As a result, the market capitalization of cryptocurrency falls to $300 billion.
There is no apparent reason for this crash; however, some people say it’s because of increasing control over cryptocurrencies by the Chinese government and the ban on ICOs.
Bitcoin has a sharp dive in value to $43030 from its high at over 4700. Ethereum and other such popular crypto tokens appear to be following suit with crashing prices as well, seeing that they started this year.
This collapse comes days after South Korea, a key crypto market, banned anonymous crypto accounts. At the same time, new measures were being introduced to facilitate the regulation of cryptocurrency trading better.
Bitcoin fell more than 10 per cent within an hour on Tuesday night, and the price has been sliding ever since.
The CoinMarketCap stock market index is currently showing that almost every cryptocurrency has plummeted in price over the last 24 hours.
Bitcoin had at one stage risen to an all-time high of nearly $20,000 before the end of 2017, and many experts believed it would rise further in 2018.
However, Tuesday’s massive collapse may signify that market confidence is faltering.
Some experts believe the market may be reacting to fears of South Korea’s moves to clamp down on trading activity.
Daily transactions with digital currencies have steadily increased over the past year, particularly during the latter part of 2017.
Since central banks or governments do not regulate cryptocurrencies, their value is based solely on what investors are willing to pay for them at any given time.
It is essential to mention that the blockchain technology underpinning cryptocurrencies have been designed to ensure that participants can remain anonymous while carrying out their transactions.
However, authorities in South Korea have said they will be monitoring illegal activity around cryptocurrency trading.
Institutional money has also avoided the dip and is taking advantage of any opportunity to invest in crypto, as seen with Microstrategy purchasing 1900 BTC worth around $91 million on December 30 2021.
Cavendish’s argument goes like this: if you see something worth buying at an affordable price, it makes sense not only to buy one but two or three because their value will sky-rocket about other assets sooner rather than later!
Cavendish believes now, though, is different due mainly to institutions being attracted into cryptocurrency markets thanks again primarily through Bakkt, which launches late October. This means investors have less fear about missing out should Bitcoin begin faltering downslope – following last year’s pattern where futures started trending higher and a bull-run followed soon after it.
According to Mr Cavidish, the value of bitcoin will settle around halfway between $4,000 and $60,000 long term as institutions begin to raise capital through ICOs, which is a first for any asset class in human history.
Cavendish also states that he believes the next bull run will attract a broader range of investors who have been sitting on the sidelines since last year.
When asked about the reason for such a massive price drop, Cavendish stated: “I believe what is happening is typical market volatility which has been caused by fear & panic within the community.
Bitcoin, according to many reports and statistics released this year, will be embracing institutional money, and there’s no doubt that even retail investors will feel more confident also investing into cryptocurrency.”
Bakkt, the cryptocurrency platform launched by NYSE owner Intercontinental Exchange (ICE), is probably to blame for this crash.
The ICE announced that it had received approval from the CFTC to move ahead with its plans of offering physically-settled bitcoin futures contracts, which are due to launch in November 2018.
Bitcoin Cash fell as much as 47 per cent from the high of $727.38 reached on Wednesday morning. The world’s second-largest cryptocurrency dropped just over 12 per cent against the U.S. dollar during that time, according to data from CoinMarketCap.com
In the rest of the top 10 cryptocurrencies, IOTA fell as much as 20 per cent on Thursday before rebounding slightly to trade about 9 per cent lower on the day around $3.28 at 1 pm London time. Ripple dropped by 21 per cent to $0.5609, while Ethereum went down more than 16 per cent to $355.50.
In general, what everyone saw in 2018 regarding cryptocurrency is a lot of pushback from the traditional financial institutions and world governments.
These actions by large organizations in 2018 have led us closer to mass adoption. In my opinion, it is a sign they are becoming more comfortable with cryptocurrency and blockchain technology in general.
In addition, financial institutions and large companies like Fidelity, Nasdaq and Goldman Sachs, who have previously shied away from cryptocurrency, are now making big moves into the industry.