Bitcoin price has already recorded a 10% dip and continues to follow the downward trend
The cryptocurrency market is going through a slump recently. Famous cryptocurrencies including bitcoin, ethereum, and dogecoin are facing steep price volatility in the last few days. While bitcoin price has already recorded over a 10% dip, it continues to follow the downward trend. On the other hand, the all-in-all social cryptocurrency, ethereum, also experienced a 12% price fall, causing great worry to investors. Dogecoin also fell by 16% this month.
Before the bitcoin price started going down, it hit a recent high of US$52,000. Later, El Salvador announced that the country is legalizing the usage of cryptocurrency and businesses should accept them from consumers. Since that was the first positive move from any government, crypto investors thought it would boost the bitcoin price. Unfortunately, it didn’t go well as per their expectation. Surveys show Salvadorans being skeptical about using bitcoin as a legal tender. They are worried that the digital token’s volatility could affect the economic status of the country. This marked the beginning of bitcoin’s fall followed by China’s crackdown on the cryptocurrency sphere. However, despite the plummeting value of bitcoin, crypto investors are less worried about the trend. They think that this is just another speed breaker where bitcoin will tumble and get back to track in no time.
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The Continuous Fall of Bitcoin Price
Bitcoin price is steadily falling and might reach US$40,000 in the coming days if it fails to recover anytime soon. Since topping the market at US$52,000 on September 6, the digital token’s price has hovered around US$45,000 ever since, struggling to make a comeback with its usual spirit. But this is the second time in the year such a downward trend is befalling bitcoin. Earlier, the bitcoin price fell drastically when it reached a record US$63,000 in mid-April. Elong Musk’s denial to accept bitcoin payment, China’s crackdown on bitcoin mining and the bitcoin halving have caused the cryptocurrency’s value to drop as much as 50%. Fortunately, bitcoin merely escaped the death cross. But from the beginning of July to September, bitcoin came across a gradual value surge and was trading at about US$50,000.
Although the bitcoin price fall could be temporary, crypto investors are saying that these constant price plummets and severe volatility is changing the nature of bitcoin and its whole purpose. For many years now, bitcoin us seen as a long-term investment plan. The crypto circle call bitcoin ‘the gold of the digital currency market’ for the same. But since bitcoin prices are moderately maintaining their ups and downs for almost a year, much doubt if cryptocurrency could ever go up any further.
What Cause the Bitcoin Price Fall?
A few months back when bitcoin was rallying at a record price, China viewed the expenses the country is sending on power consumption. Being the largest bitcoin mining far, China couldn’t take the fact that their bitcoin miners were consuming way too much electricity, which could one day impact the general users. To keep the mining and power usage under the tab, the Chinese government scrutinized bitcoin mining and completely banned it inside the country. The People’s Bank of China (PBOC) has announced that it is illegal to facilitate cryptocurrency trading and that it planned to severely punish anyone doing so, including those working for overseas platforms from within China. Following the blanket ban, many other agencies and organizations also came in support of the government regulations.
Since the beginning of September, the move has further intensified and caused chaos in the cryptocurrency market. Ten Chinese agencies, including the Central bank and banking, security, and foreign exchange regulators have condemned bitcoin and agreed to root out ‘illegal’ cryptocurrency activity.
Why is Bitcoin Investors Less Worried about the Price Fall?
For long-term investors, this bitcoin price fall is just one of the many hurdles they have come across. Whether we agree or not, it is evidently proven that despite facing many hectic circumstances, bitcoin has always managed to bounce back with better performance. Many crypto experts say that the recent dips are nothing to be overly worried about.
Mainly for those who have come across the 2017 bitcoin crisis, this 2021 volatility is like a piece of cake. However, that doesn’t mean that investors should pump in as much money as possible and either wait for the trend to gain more benefits or lost their investment. Instead, they should always maintain a low profile in cryptocurrency. According to experts, cryptocurrency investments should be under 5% of anybody’s portfolio.