| Author | Message | ||
     Entrepreneur Kurra Bewarse Username: Entrepreneur Post Number: 3471 Registered: 05-2011 Rating: N/A |
Why Did Bitcoin Tumble and What Is the Outlook for Prices? The Bitcoin rollercoaster is back. The cryptocurrency fell by as much as 15% Sunday with rival coins like Ether and XRP also plunging. The retreat came after Bitcoin hit a record high of more than $64,000 Wednesday as the stock-market debut of the U.S.’s largest exchange for the tokens, Coinbase Global Inc., stoked enthusiasm for all things crypto. While prices steadied on Monday with Bitcoin holding just below $57,000, that’s still down about 12% from last week’s intraday peak. So what’s sparked the slide? 1. Regulation fears On Friday, the Turkish central bank said it would ban their use as a form of payment from April 30 and would prohibit companies that handle payments and electronic fund transfers from processing transactions involving crypto platforms. 2. Overexcitement Any big rally offers potential for the market to get ahead of itself. That’s the view of Galaxy Digital founder and long-time crypto bull Michael Novogratz, who wrote on Twitter he sees the retreat as a healthy correction. 3.Idiosyncratic factors Other things could be adding to the mix. Industry news site CoinDesk reported Saturday that power outages in parts of China had knocked out a significant amount of Bitcoin mining capacity, which reduced the overall processing power of the cryptocurrency’s network. How significant are the drops? Given the frequent warnings from mainstream financial figures of a speculative mania in cryptocurrencies, any substantial drop reawakens memories of the 2017 crash. Back then, Bitcoin fell from more than $19,000 to under $4,000 by the end of 2018. While the current retreat is notable, it’s not on that scale. Bitcoin is still 93% higher than it was in January. Volatility is routine for the asset class: the 15% intraday drop on Sunday was only the biggest since February. Ether, which fell as much as 18% before closing 9.4% lower on Sunday, is up more than 200% this year. |