Articles

Is Bitcoin dead?

by Mathhias Kuerpick Financial Writer

Bitcoin, at one time, was the most talked about topic in the world. Now, due to its steep decline, people have left wondering whether bitcoin is dead. On Tuesday, bitcoin dropped below $19,000. It is the lowest the Crypto has dropped since June. Many investors think that the current crash may very well spell the end for cryptocurrencies.



Since 2010, the headline "is bitcoin dead" has been seen 396 times. But the truth is its volatile nature is why it dies and rises again. Young buyers want high returns. However, due to the frequent decline in Crypto, they are inclining towards stocks.

So the question remains whether BTC is dead. 


Let's take a look at some reasons why Bitcoin is declining. 


The reason why Crypto seems to be dying

Since December 2021, Bitcoin hasn't touched $50,000. However, BTC started this year on a positive note and experienced its best period in November 2021, when it touched $68,000.

Some experts believe that the disastrous Ukraine war has led to a rise in inflation-affecting Crypto and stock markets. Unfortunately, though, the price of stocks has also been declining. It is believed that investors are not looking to take significant risks, and Crypto is on a continuous decline. In recent months, the cryptocurrency market has moved in sync with the stock market. Other cryptocurrencies like Ethereum are showing a similar pattern of decline by falling below $1600 on Tuesday when it was $1700 on Monday.


Also read: Forex trading secrets


One big reason for crypto death is Celsius pausing its operations. Celsius is a platform for buying, selling, and swapping Crypto. In June, they announced the halting of their operations, stating "extreme market conditions". This resulted in crypto nose-diving as investors started dumping their Crypto. Recently, Daniel Leon, co-founder of Celsius, declared his shares worthless.  


According to Edul Patel, CEO and founder of Bitcoins4cards, "The crypto market has been under pressure from the Federal Reserve, hiking the interest rates to combat inflation over the past few months. Bitcoin, Ethereum, and most cryptocurrencies suffered losses over the weekend after a broad sell-off following the data showing US inflation hitting a 40-year high."

The rise in interest rate is a common indicator of recession. This has resulted in investors losing trust and selling off their crypto assets, causing a further market decline. 


The Luna and terra stablecoin is another reason for the fall of Crypto. Both Luna and Terra coins were said to be less volatile and remain at a fixed price over time. The block developers used complex algorithms to make sure they remained priced similarly to the Euro and US dollar, thus adding to its stability. Everyone holding Terra received 20 per cent interest due to Anchor protocol which is similar to a savings account in a bank. But due to rumours that the interest rate of Terra will charge from 20 per cent to variable, the Terra holder started selling them and buying other stablecoins. This whole episode caused a $40 billion loss to the crypto market. 


The lower acceptability of the cryptocurrency has also contributed to the death of bitcoin. Many governments are also not so inclined towards accepting Crypto. The governor of the Reserve Bank of India, Shaktikanta Das, called cryptocurrency "Clear danger". Russia recently proposed prohibiting the mining and trading of cryptocurrencies in Russia and stated danger to citizens' well-being, sovereignty, and risk to financial stability. China also clamped down on cryptocurrency by warning investors against cryptocurrency. However, China has not prohibited people from holding it. 

 

But is it dead?

Since cryptocurrencies are very unstable, these ups and downs are expected. But many leading crypto investors believe it is just a bearish phase, and it may rise again. In addition, governments like the Central African Republic and El Salvador are fully adopting cryptocurrency as a medium of exchange


It is fair for investors to panic when Crypto prices drop and see Crypto dead in the news. Experts say that it is just the nature of Crypto, and there is no need to be alarmed. It is advisable to invest in Crypto. For example, in December 2017, the price of Bitcoin was $18.674, but in January 2018, it was around $6350. Crypto has gone through many phases like this, and it still rose. 


According to cryptocurrency enthusiasts, the recent market fall is a great opportunity to purchase these cryptocurrencies at a great price. Cryptocurrency prices have historically fluctuated dramatically. It is also true that crypto holders have been rewarded for panic selling. If those fluctuations don't affect you that much, then this fall will feel the same. Alternatively, stablecoins are also a good option because they are more stable. There are always "buyers beware" in the case of cryptocurrency. Crypto experts also advise keeping less than 5% of the total portfolio as crypto investments. 


Bitcoin is a good option if you know the fundamentals. Then again, one tweet from Elon Musk will most likely lead to a rise in the crypto market.



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About Mathhias Kuerpick Advanced   Financial Writer

32 connections, 0 recommendations, 161 honor points.
Joined APSense since, April 4th, 2022, From Jaipur, India.

Created on Sep 12th 2022 03:17. Viewed 164 times.

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