Home Business The Downfall of Cryptocurrency- Why Cryptocurrency Crash?

The Downfall of Cryptocurrency- Why Cryptocurrency Crash?

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The Downfall of Cryptocurrency- Why Cryptocurrency Crash?

Recently you all must have noticed that the crypto market has caused quite a buzz in social media and other online forums and perhaps even in your dinner-time conversations. But what is all this commotion about?

This article is about the recent downfall of cryptocurrencies in the crypto market.

This article is on the downfall of cryptocurrency. We will let you through some critical aspects of this phenomenon of cryptocurrency.

You need to understand the following essential concepts first.

1-what cryptocurrency and crypto market?

2-how the market works?

Then we will look into the reasons for the market crash of cryptocurrency and how it has affected people at all

levels. Then we will figure out the factors that can help the market to grow again, and at last, we will look into the future of cryptocurrency. that is 

What is the cryptocurrency and crypto market? 

 

Cryptocurrency is a virtual or digital currency that works on blockchain technology, a public ledger enforced by a distributed network of computers. it works as a medium of exchange online

to buy goods and services and make payments. For example

  • bitcoin
  • ethereum 
  • dogecoin

 These are some of the popular cryptocurrencies.

Cryptocurrency is decentralized and free from any third-party interference. Which means it is not issued or controlled by any government or central authority.

Crypto in cryptocurrency stands for cryptography which uses encryption and decryption to secure the data.

The Crypto market is where you can trade cryptocurrency. Cryptocurrency trading is an act of speculating the price movement of cryptocurrency without taking ownership of the underlying coins.

Through a trading account or buying and selling the underlying coins via an exchange, you can buy cryptocurrency if you think it will rise in value or sell them if you think it will fall.

How does the Crypto market work?

Now let’s understand how it works. The cryptocurrency price is quoted in conventional currencies, i.e., us dollars, and you never take ownership of the cryptocurrency itself.

One can buy and sell at cryptocurrency through their trading account or via exchange which helps them speculate on whether the chosen cryptocurrency will rise or fall in value. Both buy and sell leveraged products, which means you are required to put up a small amount as a deposit known as margin to gain total exposure to the underlying market. Your profit or loss is majorly calculated based on the full size of your position. 

So leverage can affect your profits as well as your losses if the market moves against you. so that makes me question 

What are the reasons behind the market crash of cryptocurrency?

On 19th May 2021, the crypto market saw a massive drop in the prices of cryptocurrencies, including Bitcoin Ethereum and BNP Crashed up to 30 percent within a span of just 24 hours. This came in the backdrop of the Chinese regulators announcing a ban on cryptocurrency.

China has banned payment companies and financial institutions

from providing any services such as registration, trading clearing, and settlement related to cryptocurrency transactions.

This announcement made by china broke the markets back, and then the panic increased because Tesla announced that they would not

favor bitcoin on environmental concerns anymore.

Therefore they will not accept any payment made by bitcoin, and also there are rumors of IRS investigation into the largest Crypto

exchange platform Binance, which also has weakened investor’s resolution to invest more in the crypto market.

How has it affected people at all levels? 

Now we know the reasons behind the crypto market crash

so let’s discussed how it has affected people at all levels.

The crypto market means different things to different people.

It is an object of speculation that consumes almost all the media coverage about the space to many people.

 The day the crypto market crashed was a black day as they faced a tremendous loss of the leverage invested in cryptocurrencies; even the Bloomberg galaxy crypto index plunged 19.2 percent in its

worst slide the year. To others, the crypto market is more than a speculative instrument. For them, this incident proved to be a huge opportunity. 

As they got a chance to uncover problems of the system of the crypto market like high fees to trade at the most crucial moments

and find a solution to these problems by adding more capacity and efficiency to the system. 

Factors that can help the Crypto to grow again.

So now we have covered everything about the market crash of cryptocurrency.

let’s dive into the factors that can help the market to grow again 

MicroStrategy:

Despite their dramatic downturns, these cryptocurrencies have

consistently recovered from their downtime. People in the crypto market systems have termed this decline as a short-term correction.

Long-term investors like Microstrategy call this crash a buying opportunity of these cryptocurrencies and are investing more to stabilize them.

Many people believe that what we witnessed in the last few days was the liquidation of the leverage long positions followed by a panic sell-off and is considered a very normal phenomenon in thin markets like cryptocurrency.

They believe that this situation can be thought down by extensive cryptocurrency adoption and constant participation in the crypto market.

Final Words:

The Future of Cryptocurrency and Crypto Markets?

This scenario questions what the future cryptocurrency and crypto market holds; cryptocurrency is a highly speculative and volatile investment. It may or may not stabilized with time. Therefore there is no guarantee for these cryptocurrencies that all will always recover from this type of market crash.

A few crypto market experts say that investors should hold a long-term view of the digital assets market.

As they will bounce back swiftly, small investors should be better off staying away from the market as this current volatility can be overwhelming.

Some experts suggest that holding on to these cryptos will be a wise option. Small investors should buy these cryptos slowly and steadily through a systematic plan.

Therefore if you’re thinking about investing in cryptocurrency, be sure you know what you’re getting into, although the crypto market is

lucrative.

Keep in mind that there’s always a chance that sometimes cryptocurrencies are not able to bounce back. so this is all about the downfall of cryptocurrency

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