Will Bloodbath end the bullishness of Cryptocurrencies?
Cryptocurrencies witnessed the high & lows in their history but the last week came as a rude shock for the crypto investors.
Nowadays the Word “Bloodbath” is getting used in the context of Crypto markets. But why? The sudden market crash and fall in the major cryptocurrencies like Bitcoin, Ethereum, Dogecoin, etc are giving room to this world. According to the Founder of CoinDcx, “Price corrections are the part & parcel of Cryptocurrencies investors should think of long term gains” Stellar & Ripple are the top losers in the market. Economist Kerry Wash said that the Government move rattled the investors. $600 million vanished in the crypto market.
The Bloodbathening of Cryptocurrencies
Cryptocurrencies witnessed the high & lows in their history but the last week came as a rude shock for the crypto investors. Bitcoin's leading crypto in the world falls nearly 30% and suffered a big loss. But why the deadly events have emerged in crypto? There are many reasons for this scenario some are given below.
1. China’s New Move: On Tuesday International news Agency Reuters gave a massive shock to crypto investors by headlining that China has banned cryptos. The news is slightly calibrated fact is that the Central Bank of China & some other payment firms modified the rules regarding crypto transactions which also took place in 2017. While after the news went on social media there was bomb shelling in Crypto markets.
2. Influencer Elon Musk: The TESLA CEO is wreaking havoc on the minds of crypto investors with his tweets & comments on Digital currencies. Every day he took a new stand on cryptos sometimes supporting it against the fight with Fiat currencies, on the other hand, criticizing it for Environmental harms, Energy usage, High prices, etc. Billionaire Mark Cuban replied to Elon Musk and said that Gold mining is more damaging for the environment.
3. Sudden Liquidations: Many firms had bet on Bitcoins using their borrowed money same method is used by retail investors to get their collaterals. This is better when the market goes steadily but in a panic situation, it leads to liquidations. On Wednesday exchanges of more than $8million were triggered in the market and leads to a tremendous increase in sell orders.
4. “Tether” issue: Tether is a stable coin which reflects that it is a type of crypto used to hold steady values. Each Tether token is backed by one US Dollar. The issue is that the company behind Tether declined to prove that the crypto is backed by US dollars. Unstable over Tether is not new but the time of the market crash and Tether's submission of its records to the New York Attorney coincided.
5. Macroeconomic Factors: As we know that the US government's decision to hike in taxation and its loose monetary policies give a message of uncertainty to Crypto investors in the USA. The global economic situation is also not good due to last year's pandemic.
When the Bloodbath will end?
Cryptocurrencies witnessed a tumultuous week after the falling of the most popular cryptos. According to experts Institutional investors are investing in the market and not waiting for the long term. The series of attacks on cryptos are the main reason for its historical fall. Main players of the market like JP Morgan, Goldman Sachs, Morgan Stanley have jumped into crypto investments.
According to Wachsman “Tremendous increase in the value of Bitcoins over the past months have made the cryptos vulnerable for profit-making. The market still looks bullish in the long term but institutional investors are investing in only BTC. Investors want to play in the crypto market in this volatile situation as we know that the prices of the crypto are dependent on a large number of factors. One tweet & media report can put the market in the dust like in the present scenario"
The market of cryptocurrencies is so volatile and unpredictable which can give historical gains & losses. Currently, the situation is different unfavorable winds destroyed the week and shattered major cryptos like Bitcoin, Litecoin, Ethereum, etc. What should be the next step? Analyzing the market is better than investing in this situation.
Edited By Team CLIQTAX
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