What caused the recent slump in the cryptocurrency market?
After months of gains, profits, and all-time highs, the cryptocurrency market is down. The unexpected turbulence has cost millions of crypto enthusiasts all around the round — but what is the driving factor if this recent crash?
Speculations from financial experts, influencers, and words from trusted sources point towards the recent crackdown of China’s illegal Bitcoin mining market. China, home to millions of illegal Bitcoin miners, met their loom when the government announced a strict ban on Bitcoin mining.
China’s Sichuan province, home to thousands of miners using both coal and hydro-powered electricity and 74% of the world’s Bitcoin mining, got the butter end of the crackdown as officials clamped hard on any bitcoin mining nest. This recent operation is bound to have an effect on the price of digital assets like cryptocurrency — however, the effect doesn’t seem to be positive.
Over the last few days, the entire market experienced a 0.91% decrease with Bitcoin going down to £30,161.54 — a 1.81% decrease. Other cryptocurrency altcoins decide to follow suit with Ethereum, Tether, and Solana having a 2.66%, 0.005%, and 3.06% decrease respectively.
Also, several resources show Tesla’s new review in the use of Bitcoin as a legal tender may have driven the sharks into dumping their coins.
Before the recent disapproving review by Tesla’s CEO and CTO, Elon Musk, Tesla had approved Bitcoin as a form of legal tender for the payment and purchase of Tesla’s goods and services. However, the billionaire engineer made a U-turn on his decision following the out spark of Bitcoin’s influence on Earth’s global warming and environmental crises.
In an interview, Elon Musk explained why he went with his recent choice as he was concerned about the commercial combustion of fossil fuels like coal in Bitcoin mining and the adverse environmental effect it can cause.
In a tweet, Elon buttressed his stand saying-
“I believe in the promising future of Cryptocurrency but that this comes with a great cost at the expense of the environment. “
Elon Musk is known to be a big advocate of the Green industry and is committed to saving Earth from the effects of global warming caused by fossil fuels.
Asides from the ban on cryptocurrency mining, the People’s republic of China has also placed a ban ordering the total prohibition of cryptocurrency and cryptocurrency-related transactions. They have ordered cryptocurrency startups, tech hubs, and educational platforms to stop their activities.
This ban got extended to their financial institutions as the government ordered every private bank and the country central bank, the People’s Bank of China to stop every payment involving the transaction of bitcoin and cryptocurrency. It’s no news China is strict with rules and regulations and enacts punishment immediately, forcing recent millions of Chinese to sell off their coins to mitigate loss in this unfavorable condition.
However, predictions have shown the tides of the market are set to change for the better as Financial experts urge users to HODL their coins in expectation of the coming increase.