It was scary scenes and heartbreaks on Wednesday, the 18th of May, 2021, as Bitcoin dropped to lower than $31,000. If you are an active bitcoin trader, you probably already felt the heat of the devaluation. However, if you’re just a bitcoin enthusiast or a passive investor, you probably heard about this devaluation from the internet’s trends or news. As expected, the word of the drop in Bitcoin’s value spread all across the internet like wildfire. There’s no better reason than because of the popularity of this currency in the crypto market.
On Wednesday, Bitcoin sold for a little above $30,000, which is the lowest selling price since the first month of the year. Since this currency is the most popular, stable and dominant in the crypto market, the whole market, including the altcoins came crumbling down. While this news was popular, not many know the exact cause. Let’s discuss the cause of this event
What Happened: Elon Musk?
The first thing you need to know is this dip of Bitcoin didn’t start on Wednesday. The currency had been losing its value some five days before the momentous day of the drop. Before this dip, the coin got to its highest value sometime in April when it sold at close to $65,000. However, since Elon’s interest in the market, he had some influence on the market trends. A simple tweet like “who let the Dogs out “influenced the value of the Dogecoin. Another influential tweet related to Musk was the announcement of the acceptance of Bitcoin as a form of payment. That single tweet affected the Bitcoin market value heavily in a positive way.
However, Elon’s s company, Tesla, took a U-turn on the earlier acceptance of Bitcoin. That was where the fall of Bitcoin started. More recently, Elon went ahead to explain the reasons for this pullout. He made it clear that Tesla dropped off because of his thoughts on the adverse Bitcoin mining effects on the environment. This had a massive influence on the reduction of Bitcoin value. However, some reports showed that a drop was imminent from the charts and blockchain reports. So maybe, these coincided and led to a high decline.
What Happened: China’s Regulation?
As usual in cryptocurrencies, regulations have always had a massive influence on the Bitcoin market. A very influential factor that comes heavy is regulations from the Chinese government. And yes, you guessed right, a Chinese regulation influenced this sudden dip. This time, China placed a ban on organizations into payment and general finances. This ban hindered these companies from offering any form of cryptocurrency service. Also, they cautioned investors of cryptocurrencies from any cryptocurrency trade.
As expected, this was a massive blow to the cryptocurrency market and Bitcoin as it dipped to a meagre value — below $31,000. However, after a short period, the value went back up to about $38,000.
If you traded your altcoins before this dip on altcoins, they’ve likely lost colossal value. So, you may need to stay patient for the market to bounce back. If you took futures trades, you might already be at some loss. If you’re a Bitcoin investor, you need to stay patient, as Bitcoin will always bounce back due to its large market cap. In the meantime, you can earn amazing rewards on Fanspel-the first blockchain-based fantasy sports platform. Create your fantasy teams and compete with managers across the globe to win awesome prizes.
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