After the crash, China announced action on cryptocurrency, and Bitcoin fan Elon Musk revealed that Tesla would no longer accept it as payment. Bitcoin prices fell below $ 33,000 – down nearly 40% in a week – before recovering and currently around $ 37,000 at the time of writing on Saturday morning.
Bitcoin: the largest cryptocurrency – hit an all-time high of $ 64,863 in April. Ethereum, the second-largest cryptocurrency, is also down in price and so are other popular coins such as Dogecoin, Cardano, and XRP. Before the crash this week, the crypto market had grown due to adoption among traditional financial firms.
Why Did The Crypto Market Really Fall?
Following Tesla’s decision, the market was already experiencing a turbulent time before China announced a dominance of cryptocurrency, which saw prices fall. China banned all its banks and financial institutions from providing any cryptocurrency-related services to customers, including coin offerings and transactions.
The country’s financial industry bodies also warned against speculative trade. The National Internet Finance Association of China, the China Banking Association, and the Payment and Clearing Association of China issued a joint statement.
It reads: “Recently, cryptocurrency prices have skyrocketed and fallen, and the speculative trading of cryptocurrencies has resumed, a serious breach of people’s property security and disrupting the general economic and financial system Used to be.”
Crypto Expert Says “Crypto Market Will Recover”!
“I think it’s here to stay. Cryptocurrency is not going away as gold is not going. Yes, it has had its ups and downs and [Wednesday] was not a good day for it, but Joe Anything that is relatively new is true.
It is here because people in the market want something other than the traditional currencies we have and whether it is right or wrong, it is clearly something that the market wants. “I would argue that the problem is to educate investors about this stuff because it is about building infrastructure.
Because I think we are at a time where many investors don’t know the difference between Ethereum and Filecoin and Solana Are. They all see it as crypto and you won’t buy stocks that way.
So, I think we need to pay more attention to what these tokens represent, what the network value is that supports them. Giving and when we have that level of education, you will see that some amount of instability will go away.
Will the Crypto Market Bounce Back?
The world’s second-largest economy has discouraged buyers, but experts believe this is another angle of its overall volatility. Cryptocurrencies have a tendency to drift wild and unpredictable. As such, it may soon regain as it loses value.
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Over the past decade, investors have tracked significant declines from dizzy heights more than once. At the close of this time last year – in June 2020 – the price of bitcoin was just under $ 10,000.
According to Bespoke Investment Group, the average crypto decline from a “record” high is between 40 and 69 percent of all trading days. Bitcoin, in particular, has fallen more than 40% from its peak. These figures mean that bitcoin and other currencies may eventually recover catering values.
Will The Price of Bitcoin Rise in Future?
Mike Novogratz, CEO, and chairman of Galaxy Digital told CNBC’s “Squawk Box” that the price of cryptocurrency may not rise again for some time.
“You had a confluence of events … where you started breaking the positivity in the price action, and now we have a liquidation event,” Novogratz told CNBC. “It’s not going to bounce back right now. It’ll consolidate for a while.”