The recent fluctuations in the crypto market created a chaos in the investing and trading sector. Bitcoin and other altcoins fell a great deal within a few hours. One of the main reasons for this downfall of the market was the crackdown from the Chinese regulators on the use of digital coins.
Bitcoin saw a decline of over 30 percent, however, it crawled back to nullify some of the loss made. Other digital coins including Ethereum also lost a quarter of its total value. Ethereum was one of the most high-profile cryptocurrencies of the last month, crossing the $4,000 mark with its upsurge.
Over the last 24 hours, more than $8.6bn of crypto positions have been liquidated. These sharp moves caused major disruptions in the market, and many people started pulling out their investments amid severe losses.
The People Bank’s of China warned monetary institutions on accepting cryptocurrencies as a mode of payment and transaction. They added a cautionary statement about offering payment services related to different products. This statement meant that the regulators could tighten their grip around the crypto investors and traders.
Elon Musk turning against Bitcoin
Mr. Musk has been a constant supporter of cryptocurrencies, and his tweets have had a huge impact on the performance of crypto tokens, mainly Bitcoin and Dogecoin. However, recently he released a counter argument against Bitcoin, prompting the start of the market’s decline. Elon Musk stated that bitcoin cannot be accepted as a long term payment gateway. He cited the unsustainable mechanism of bitcoin mining as the primary reason for this. Consequently, Tesla has stopped accepting payments in Bitcoin.
The crypto market has been highly volatile in the last few weeks. The value of Bitcoin has swung in wide ranges. The technical analysis were also proven to be vague at many times. Renowned crypto exchanges, like Binance and Coinbase also faced technical errors. This was mainly because many users tried to sell their holdings in a short time period.
The Public Bank of China stated that virtual currency ‘is not real a real currency’ and ‘should not and cannot be used as a currency in the market.’ China has never been really supportive of Bitcoin, however, they have tried to come up with their own digital currency ‘Yuan’. The pressure of China can result in many major developments in the crypto market, as it is a major role player in the crypto market.