What Caused Bitcoin, Ethereum, and Dogecoin to Collapse Today?
Cryptocurrencies are experiencing a volatile period with unpredictable price movements after a year of increases and record highs. The cryptocurrency market plummeted on Tuesday as officials tightened their grip on the industry. Bitcoin (BTC), Ethereum (ETH), and Dogecoin (DOGE) were all down 7%, 9%, and 20%, respectively, with several other crypto assets falling much more.
Why is the Price of ETH, BTC, and DOGE Dropping?
Following China’s crackdown on cryptocurrency miners last week, investors are on alert. At a time when climate change anxieties are growing, the Chinese government is allegedly concerned about the mining industry’s rising energy use. According to the Chinese daily Global Times, the crackdown will result in a 90 percent decline in Bitcoin mining capacity in the country.
China has also taken steps to limit the capacity and willingness of its financial institutions to collaborate with crypto-focused businesses. The country’s central bank has ordered Alipay, a digital payments company, and some of the country’s leading banks to stop offering any cryptocurrency-related services.
China’s recent actions coincide with calls from regulators in the United States and other nations for greater oversight of cryptocurrency markets. Gary Gensler, the Securities and Exchange Commission (SEC) chairman, wants Congress to empower financial regulators to monitor cryptocurrency exchanges directly.
Senator Elizabeth Warren has asked regulators to address the industry’s negative aspects, such as its impact on the environment and the massive losses suffered by many small investors. Andrew Bailey, Governor of the Bank of England, went so far as to advise crypto investors that they should “be prepared to lose all your money.”
There’s also growing concern that Tether (USDT), a stablecoin with a market cap of more than $62 billion, will be subjected to increased regulatory scrutiny shortly. According to specific estimations, Tether accounts for over 70% of bitcoin trading volume on exchanges.
Investors are reevaluating their prognosis for cryptocurrencies like Bitcoin, Ethereum, and Dogecoin as regulatory risks rise, and many are opting to sell now.
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Cryptocurrency is criticized worldwide for its “outrageous” volatility, which often scares newcomers away before they can sample the delights of the cryptocurrency markets. People are more frightened by large red spikes on the charts with a double-digit negative % change in the prices than by similar positive percentage changes, and here is where negative bias comes into play.
This volatility in the cryptocurrency markets may have resulted in losses for investors. Still, it has also turned millionaires into billionaires ‘overnight.’ As a result, it is a piece of advice to everyone to recognize that volatility is a vital market idea to comprehend before embarking on the roller-coaster rides that cryptocurrencies might take you on.
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