Cryptocurrency, a digital currency, ran on blockchain technology, a highly advanced one. And a new concept in technology progression, making cryptocurrency transaction information safe and secured.
Since its introduction, cryptocurrency has been framed as an example of a future form of payment. But recently, cryptocurrency has seen a trend it has never viewed, a fall in what cryptocurrency has become till now.
In recent readings, it has been seen that cryptocurrency has been falling in its value in the market; for more detailed information visit the Official site here .
Popular cryptocurrencies like bitcoin, Ethereum, and Dogecoin have faced a massive drop in their market value, with Bitcoin falling in about 39 percent of its value in a short period, causing millions of dollars to lose millions of dollars among many buyers and investors.
But how does this happen at all? How has a trending platform like cryptocurrency has seen such a drastic situation in market value? What effects can it have on cryptocurrency buyers and trades and the market itself? You can check this out buy xrp.
In this article, we will be reviewing the causes that lead to the fall of cryptocurrency in the market and what possible consequences it can have on the trading market.
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Factors That Result in the Fall of Cryptocurrency in the Market!
The most notable reason behind the fall of cryptocurrency is the Chinese government’s decision. For banning the mining and use of cryptocurrency as a legal tender, the market struck a massive loss in mining and investing numbers due to this decision.
How can restriction in only one region affect it this much?
Cryptocurrencies are digital assets, so their values depend on the market’s dynamics and demands. China has been a hotspot of cryptocurrency platforms, with a comparatively higher density of buyers and miners.
Hence, a cryptocurrency ban in this country will have an immense effect on cryptocurrencies platforms.
The most notable reason for the ban of cryptocurrency like Bitcoin is a concern of demerits that has been caused in the market. Bitcoin, for example, is a highly volatile currency with some considerate adverse effects on its usage.
Moreover, its anonymousness is used to cover illegal or criminal activities. Therefore, these exchanges are a concern to the Chinese government, and hence, these steps were considered and implemented.
Effects of Falling Cryptocurrency in the Market Network
The ban on cryptocurrency was initially thought to be a good solution, but many drawbacks revealed proper analysis. Since Chinese crypto buyers cannot use their cryptocurrency investment in any of its usage, they face massive losses from their investment, the worst being who has been investing as the only source of income.
These steps also affect cryptocurrency platforms as some of their servers are established in China. As a result of the ban, these servers no longer contribute to the total hash power Bitcoin could provide.
It affects Bitcoin users all around the globe significantly as they all face massive losses, not just Chinese users anymore.
Cryptocurrency Registration, trading and exchanges, transactions, and cryptocurrency banking services were also banned from immobilizing any exchanges made, legally or illegally, completely.
It leads to massive disappointment to anyone actively investing in these commodities or someone who wants to start investing or trading using cryptocurrency. It also affects the total marketing volume people have been involved in.
Big influencers and investors such as Elon Musk himself have stepped forward to buy 1.5 billion dollars worth of Bitcoin to revive the fall Bitcoin has suffered. While some crypto communities have criticized this act as manipulating cryptocurrency, it has minimized buyers’ losses.
In the end, it has been discussed why cryptocurrency has fallen in market value to an alarming state and the possible consequences it can cause to the global market. It is so considered that a ban on cryptocurrency was not an ultimate solution.
Elon Musk tends to be a crucial reason behind the cryptocurrency market crash. After announcing bitcoin payments, he later suspended cryptocurrency as a payment method in no time.
Still, cryptocurrencies are not ideal as currency alternatives, and better regulation terms or improvements in design and dynamics should come into play as quickly as possible.