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The realm of cryptocurrency felt like it’s Black Thursday all over again as the massive sell-off continues to pummel Bitcoin (BTC), Ether (ETH), and yes, even altcoins. There are several reasons why this is happening, and because of this, folks are now musing as to whether these digital assets are busts or buys.
Crypto chaos
Albeit some of the digital currencies are slowly recovering from recent price plunges, they’re still trading in deep reds as Bitcoin is probably the one that endured the hardest blow. CNBC noted a point in trading on Wednesday where the BTC nosedived as low as 30 percent, which is close to $30,000 ($30,001.51 to be exact). An amount to which the digital currency hasn’t delved into since late January.
Fortunately, BTC went on a comeback as trading on that day progressed. At the time of writing, it sits at $39,514.965, which is still in the red at -2 percent.
Traders are well acquainted with good ol’ Elon Musk’s tweet about the Bitcoin being dirty crypto. But recent events have led to BTC stumbling anew.
Reasons why it plunged
One of them is China’s crypto crackdown, where its People’s Bank of China recently made it known that both payment services and financial firms will be barred from doing business through cryptocurrencies. It’s all too obvious that such a move is just to beef up their newly introduced digital yuan.
Analysts, however, stated that such a move by the PRC would have repercussions. According to BK Asset Management Managing Director Boris Schlossberg, “Although China represents as much as 75 percent of all BTC mining, the Chinese government is clearly averse to seeing bitcoin’s rise in popularity as a medium of exchange. Instead of those mentioned above, he stated that these Chinese regulators are pretty much discerning in witnessing their virtual money become the primary unit of account in their country, Market Watch writes.
Are you interested in digital yuan? You have to consider that this new digital asset is being controlled by the Chinese central bank, and knowing PRC, they’re very much into stalking its people, including what they’re doing with their money.
Another cause of the latest crypto crash is the potential regulation by the U.S. It was mentioned in a Bloomberg report that U.S. regulators are now weighing in to have a second look at legislating cryptocurrencies following the whirlwind of events, especially with bitcoin.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
