London, UK, 14 July 2021, ZEXPRWIRE, Bitcoin, the first-ever cryptocurrency, came out in 2009. Back then people showed the least interest and trust in the token because of many flaws which made the token look less promising in comparison to the prevalent financial systems. It was not until the 2017’s start and mid of December that bitcoin got on track which led it to a point where people’s opinion about the coin changed all over. The worth of the coins increased 20 times increasing from a value of 1000 US dollars to 20,000.
Bitcoin has met mixed reactions internationally. We have seen that many nations look up to it as a future of the financial system while others find it a threat to their sovereignty.
The Investment Center Broker Mr Michael Cohen says that none of the nations think that it should be used the way it is, without any rules and regulations and this is why all of them have devised plans which allow the residents to use it but within given and predetermined limits.
When Bitcoin saw a worldwide welcome and the investors started showing increasing interest, soon we saw many other digital tokens making it to the market. The Fear Of Missing Out (FOMO) made many people react and purchase many but only a few managed to survive. None of them has reached the heights bitcoin did, as of now. Not that they don’t have the potential or have any flaws which keep them from reaching the same levels of popularity but we have some more technical reasons which play a key role behind the massive success of bitcoin that other cryptos do not enjoy.
One of the major ones is access to the blockchain. Blockchain is all about solving complex mathematical equations using high technology and powerful computers. Access to blockchain makes the currency more stable and helps the investors build trust in it. A very small fraction of the thousands of Cryptos have access to this and this is why they have little or no following.
Despite the ever-growing popularity of tokens, they are not something that can be regarded as a highly stable or less volatile investment. We all know how it takes something insignificant otherwise, to trigger a downturn such as a tweet or a statement. We have seen all the famous cryptos riding a rather bumpy ride and it is this nature of the cryptos which make it suitable for investment in the eyes of many.
The Massive Crash
The past few weeks have been hard for cryptocurrencies altogether. Bitcoin, Dogecoin and Ethereum are leading names and have shown massive decile in a period of the last few weeks. Since the start of April, the price of Bitcoin has dropped by half while that of Ethereum has gone down by around 53%. Dogecoin has also experienced a drop of around 60%. Mr Cohen has said that the recent crash in all these mainstream currencies has led to increased concern and apprehension which is very much justified because the most volatile stocks usually do not fall the way cryptos did.
What exactly happened?
It wasn’t just a tweet or news behind the drop this time. In fact, it was the practical measures that led to the damage. One of the major contributing factors was the announcement made by CEO Tesla Motors who is one of the most relevant people.in the crypto world, Mr Elon Musk, who said that his company is calling off the decision to accept Bitcoin as a payment method. He said that this decision is being done keeping in mind the amount of pollution that mining of Bitcoin leads to.
When the currencies were dealing with the massive damage, China began on its journey to carry out a massive crackdown against the one’s mining crypto. This was also a result of the soaring energy usage needed to mine. Authorities say that presently the climate change fears are all around and in this situation, something like mining could not be afforded. This crackdown has resulted in 90% less mining capacity of bitcoin, tremendously impacting the price.
Apart from this, the IRS is not actively looking into the tax collection from crypto beneficiaries. This stringent behaviour might be another reason behind the drop.
Time to Panic?
The immensely speculative nature of the currency has contributed significantly to its volatility. We started hearing debates regarding the existence of the currency in a few decades. This and the declining prices have baffled the investors who are panic selling, leading to a further drop. Experts say that this drop is definitely nerve-wracking but not something huge and new to the Cryptos. For instance, Bitcoin has survived times when its value went down by 80% and it bounced back. Similarly, Ethereum has also lost around 95% of its worth once but managed to get back on track. In Mr Cohen’s opinion, this all clearly suggests that there is still hope that all the cryptos bounce back soon.
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