It is the worst month in the history of bitcoin and cryptocurrency market. Since 2017, Cryptocurrencies including Bitcoin, Ethereum, and Lightcoin have seen unprecedented growth, despite remaining extremely volatile.
Different financial institution has an opinion on the cryptocurrency
market which have a market cap of around 175 Billion USD, the crypto sector continues
to grow, as it continues to see wider mainstream adoption.
The price of one Bitcoin passed 15,000 USD across many
exchanges today taking it higher than previous all-time highs.
Ethereum's 27-year-old founder says we're in a crypto
bubble. It seems that the bubble just got bursted. However, it is too early to
conclude.
The price of Bitcoin fell 8% Friday and have plunged about
36% in May — their worst monthly performance since September 2011.
There has been steady outflow of bad news that has sent
bitcoin spiraling downward since it hit an all-time high above $64,000 in
April.
Elon Musk, the CEO of Tesla (TSLA) has a fair share of the cause
of the dip. He did an about-face on bitcoin, telling customers recently that
the electric car giant will no longer accept bitcoin as payment for its
vehicles because of concerns about the environmental impact of bitcoin mining,
which is extremely energy intensive.
Though the unclean energy use by Bitcoin miners have been
debunked with substantial evidence, it seems that the Musk’s tweet has other
agenda.
Musk has since softened his stance a bit, agreeing — thanks
to the prodding of software CEO and crypto evangelist Michael Saylor of
MicroStrategy (MSTR) — to meet with the heads of several bitcoin miners based
in North America to talk about energy usage concerns.
China also has stepped up its crackdown on crypto and the
United States Treasury department has unveiled new plans to tax bitcoin more
heavily while the Federal Reserve has hinted about the possibility of a digital
dollar.
Also, this is not the first time China mention a crackdown
on cryptocurrency. This has been stated in 2017, but the recent statement seems
to be a reiteration of their stance on the cryptocurrency crackdown which was
extended to Decentralized Finance (Defi)
This crackdown news and tweets may have been brutal for many
cryptos enthusiast and investors, including day traders. The crash spilled over
to other cryptocurrencies called altcoins. Binance coin, XRP and Polkadot have
suffered massive losses this month.
Other cryptos, most notably ethereum — the second largest
after bitcoin and the backbone for many popular non-fungible token (NFT) deals
— have held up better. Ether has fallen only about 6%. Meme token dogecoin,
which Musk has repeatedly tweeted about, is down slightly in May.
So-called stablecoins, such as Tether and USD Coin, which
are tied to government-backed currencies, have lived up to their name and are
flat for the month.
Bitcoin is notoriously volatile, and prices remain up more
than 25% this year despite May's meltdown. So long-term fans, or HODLers as
they like to call themselves, have been down this road numerous times before.
Peter Smith, CEO of Blockchain.com, has stated that, it is easy
to be a crypto investor. It's extremely difficult to be a crypto trader. He runs
a crypto research, investing and lending startup that is valued at $5.2
billion.
This is a very high volatility market, and it can crush you
easily.
In December 2017, Bitcoin prices plummeted from nearly
$20,000, which was a peak at the time, to below $3,500 by early 2019 before
rebounding. Hence, it is possible for this to be one of down dips.
in September 2011, bitcoin's plunge of nearly 40%. This was
in the middle of a three-month slide from August through October of that year
where prices plummeted more than 35% each month.
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