After hitting a historical high of $64,863.1 in April, the price of Bitcoin has dropped over 50%. This prompted many to fear the cryptocurrency’s so-called “long winter” has arrived a bit early.
The Various Reasons
A crackdown in China on Bitcoin miners, the grease that keeps the machine going, and cryptocurrency transactions utilising the country’s banking system sparked the price drop. Furthermore, Elon Musk, the poster child for cryptocurrencies, slammed Bitcoin by raising worries about its mining’s environmental effect.
An Important Note
It’s worth noting that while China has outlawed Bitcoin mining, it has not prohibited Bitcoin ownership or transaction. Its central bank had stated earlier this year that cryptocurrencies might become a kind of alternative investment.
Tesla, owned by Elon Musk, is likewise holding on to its Bitcoin assets. Despite a slight reduction in its holdings in the March quarter.
Crypto Still Is Tough In India
Buying and selling cryptocurrencies has become problematic in India, as traditional banks have abandoned cryptocurrency exchanges. The RBI’s ‘concerns’ about cryptocurrencies and its behind-closed doors prod to banks to stay away from cryptocurrency exchanges have indirectly impacted Indians’ ability to purchase and trade cryptocurrencies.
The CoinDesk Report
According to George Kaloudis, a CoinDesk research analyst:
“We are in a bear market. That does not mean the end of Bitcoin is coming. Since important financial institutions have now made Bitcoin investments, my position is that Bitcoin will not fail.”
A report by CoinDesk Research states that:
When the cryptocurrency’s market value-to-realised value measure rolls over from a peak, it’s usually a sign of extended decline. That ratio is now nothing near its all-time high. In the past, Bitcoin has experienced severe bear markets.
While the buzz surrounding Bitcoin has subsided from early this year, the cryptocurrency is still up over 200 per cent from the same time last year.
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