Bitcoin is no stranger to market fluctuations but the previous week exposed its market volatility to the world. The leading crypto fell almost 50% from its market price after consecutive blows from Tesla and China. The overall crypto community faced a decrease, but the downfall of the most popular currency became a highlight for the world.
On April 14, Bitcoin reached the all-time high value of 64,895.22 dollars. However, just a week later, it reached the market value of 32,601 dollars. The figure was even 4,899 dollars below its previous close. Ethereum, the second most-valued coin, also fell 17%, reaching the market price of 1,905 dollars.
Since the crypto circuit functions 24/7, investors and traders find it difficult to cope with sudden market fluctuations. Bitcoin is currently placed at 36,119 dollars while maintaining the 36,000 dollar mark. Ether is comfortably sitting at the 2,238 dollar market price.
What do the experts think of the situation?
Amy Wu Silverman from RBC Capital Markets stated that “Bitcoin does make dizzying and severe swings.” Michael Saylor made a similar tweet, stating that “freedom comes at a price.” Since the crypto is not backed by any centralized institution, it is subject to instant market swings. Binance tweeted that this is not the first time Bitcoin has experienced severe downfall, and it will not be the last either.
The recent fall for the cryptocurrency sector was triggered by two quick blows. The first one came from the side of Elon Musk, who announced that Tesla would stop accepting Bitcoin as a payment method to buy vehicles. He stated the reason behind the decision to be Bitcoin’s high-power consumption.
It was followed by a devastating announcement by China, imposing a ban on cryptocurrencies throughout the country. Liu He (The Financial Stability and Development committee’s Vice Premier) said that Bitcoin as an asset needs to be regulated. While the nation has not restricted individuals from trading in cryptos, the ban spelt massive troubles for the crypto sector. The development restricted payment companies and banks that offered crypto-related solutions. It acted as the push to remove fraud and speculations in digital currencies.
China’s decision might be inspired by the US Treasury Department’s latest rules. Since the Federal Reserve deemed cryptocurrencies as a threat to financial stability, large crypto transfers were asked to be reported to the IRS. While these blows affected the crypto sector, the market is finding some stability in the form of upcoming partnerships and projects.
2021 has been an amazing year for the crypto sector until Tesla refused to accept BTC as a payment method. The announcement transpired the fall of the crypto community, which was further excelled by China’s ban on cryptocurrencies. While the community is struggling, it is fighting back, showing signs of coming growth.
