- Bitcoin and Ethereum posted the largest one-day drop since March 2020 on 19th April 2021.
- The cryptocurrency market will lose nearly $1 trillion in market capitalization within just a few days.
- Major cryptocurrencies such as Bitcoin and Ethereum have crashed like anything within a very short time.
- There are many reasons behind this bloodbath.
- Here, in this blog, we will be discussing the main reasons.
China has banned financial and payment institutions from providing cryptocurrency services
- Financial institutions such as banks must not offer any of the services to their customers that will involve cryptocurrency transactions.
- In a statement, they have stated, Recently, the prices of cryptocurrency have skyrocketed and plummeted, and speculative trading of cryptocurrency has rebounded, seriously infringing on the safety of the people’s property and also disrupting the normal economic and financial order.
- On 18th May 2021, three state-backed organizations, including the National Internet Finance Association of China, the China Banking Association, and the Payment and Clearing Association of China, issued a warning on their social media.
- Officials stated that the crypto investors would have no protection if they were to face any losses from the cryptocurrency investment transactions.
- After such announcements, panics were created on the crypto markets.
- Due to this, bitcoin tanked drastically by erasing the gain made in 2021.
- They also stated that recent wild moves in the cryptocurrencies are seriously violating the asset safety of the people and are also violating the normal economic and financial order.
- This can also be considered to be a major reason for the fall.
- Also, China has warned its investors regarding speculative crypto trading.
- China is also the home for the majority of the mining operations for bitcoin.
Tesla will no longer accept Bitcoin payment, says Tesla’s CEO Elon Musk
- In March 2021, the CEO of Tesla announced that he would allow its customers to buy cars using bitcoins.
- But after a few years, he suspended the purchase of this vehicle by using bitcoins due to the environmental concerns.
- His company is raising concerns over the rapidly increasing use of fossil fuels, which is also required for the mining of bitcoin.
- He also added that cryptocurrency is a good idea, but this should not come at a great cost to the environment.
- Tesla will also not be selling any bitcoin, and they will intend to use it for the transactions as soon as mining transitions to more sustainable energy.
- They are also looking at the other currencies that will use less than 1% of the energy or transaction of bitcoin.
- There are also some of the other reasons behind the bloodbath of the cryptocurrencies.
- Investing is a very good thing because it will ensure your present as well as future financial requirements.
- Also, you should only invest in the business that you understand.
Conclusion
Cryptocurrencies can be considered to be risky investments, and they will also become more risky in the near future.
Frequently Asked Questions
Q1) Why is the crypto market bleeding?
The crypto market is bleeding because of the dampening of the investor sentiment amid all the tariffs of Trump.
Q2) Which is the most booming crypto?
Bitcoin is the most booming crypto.
Q3) Which is the next big crypto to take off?
Solana is the next big crypto to take off.
Q4) Why do cryptocurrencies rise and fall?
The rise and fall of crypto is affected by its supply and demand, availability, competing cryptocurrencies, and the investor sentiment.
Q5) Who owns most of the Bitcoin?
Satoshi Nakamoto, the creator of Bitcoin, owns most of the Bitcoin.
About Us
Nifty Trading Academy is our academy where we teach you about the stock market as well as technical analysis. We also provide live trading sessions and upload blogs for the same.