Why is bitcoin falling so fast

Contents

(1) Why did the price of bitcoin soar and plummet

The price of bitcoin has been fluctuating greatly, which can be described as “slumping and plummeting”. From November to December 2017, Bitcoin has grown by 223%. It fell 59% in the January-February period of 2018, rose 64% in February-March, and fell again by 40% in March.
Many of the same factors that affect changes in the value of other items also affect the price of Bitcoin. Because this is a brand new currency, unlike other currencies, a lot of the impact is exaggerated. Here are the five main factors that affect the price of Bitcoin.
1. The relationship between supply and demand
This is easy to understand for those who have studied introductory economics courses. There is no doubt that Bitcoin, like other currencies, is also affected by supply and demand.
The supply of Bitcoin is similar to that of gold. Just as there is a predetermined amount of gold on Earth, there is a predetermined amount of Bitcoin in the Bitcoin protocol.
One needs to mine gold to put it on the market.
Similarly, one must mine Bitcoin by using computing power to solve complex mathematical equations. When miners successfully solve this puzzle, they earn Bitcoin, which increases the supply.
The demand side of bitcoin is the same as gold and other resources. The more people who want bitcoin, the higher the price of bitcoin.
2. Media coverage
Research shows that media coverage is one of the biggest factors influencing Bitcoin price.
The more media coverage it gets, the more people know about it and possibly invest in it.
While positive media coverage usually leads to price increases, negative media coverage leads to price decreases.
Furthermore, the opinions and actions of investors tend to influence the actions of their peers, which in turn affects the price of Bitcoin.
Equally, when new businesses decide to adopt digital currencies as a means of payment, awareness, investment and prices tend to skyrocket.
An increasing number of online and brick-and-mortar stores are accepting bitcoin, which has led more people to believe that bitcoin is legitimate.
3. Political changes
As with other currencies, political events will also affect the price of digital currencies.
However, changes in value tend to be the opposite of government-sponsored related currencies. The lack of certainty in a country’s economy leads people to put their trust in digital currencies such as Bitcoin, which has nothing to do with any government.
The 2015 Greek economic crisis led to a surge in interest in Bitcoin among Greek traders. Similar repercussions occurred when the UK decided to leave the EU and the US elected Donald Trump as president.
4. Changes in government regulations
Because Bitcoin is such a novel concept, governments have struggled to determine how and whether to regulate it.
Bitcoin has nothing to do with any government, but regulation can directly affect how the Bitcoin system works. Regulatory decisions involving digital currencies have led to spikes and falls in digital currency prices.
The price of bitcoin fell sharply when China, the world’s largest crypto market, cracked down on bitcoin and shut down several exchanges.
Also, when the Japanese government officially recognized bitcoin as legal tender, the price of bitcoin also surged in the following months.
5. Changes in Bitcoin’s internal rules
No single entity controls Bitcoin, but the Bitcoin community occasionally makes decisions that affect how the system, known as the blockchain, works. Miners run software to verify Bitcoin transactions, thereby determining the rules for what constitutes a valid transaction.
Attempts to change these rules sometimes result in the creation of forks, which result in the formation of two separate chains, each following different rules. However, they are valid as long as there are miners willing to work on each chain.
In the past, the period before the fork has created uncertainty and price declines. After that, the price usually rises again.

(ii) Reasons for Bitcoin’s Plunge There are two reasons for Bitcoin’s plunge. One is that the recharge and purchase channels are not smooth, and there is not much capital inflow; , is that the holder is vulnerable to the influence of the policy market, etc., and blindly sells the bitcoin in his hand, causing a plunge at some point in time. This phenomenon, with the wider and wider application of Bitcoin, can be completely avoided after the price of Bitcoin returns to rationality.

(iii) Why does the bitcoin market change so fast

In a modern free economic society, any commodity or commodity equivalent (currency), its price changes due to its demand : When the quantity demanded is greater than the quantity supplied, the price rises; when the quantity demanded is less than the quantity supplied, the price falls. Although Bitcoin is a virtual currency, it also has the characteristics of currency, and its price also changes due to the demand.

㈣ Why did bitcoin plummet

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There are many reasons for Bitcoin’s plummeting. On the one hand, it is because of unsupported policies, and on the other hand, because of the emergence of Bitcoin Cash, the incompatibility of the two currencies has caused the price of Bitcoin to plummet.
Abstract: There are many reasons for the collapse of Bitcoin. On the one hand, it is because of the unsupported policy, and on the other hand, because of the emergence of Bitcoin Cash, the incompatibility of the two currency technologies has caused the price of Bitcoin to plummet. There are many reasons for the collapse of Bitcoin. On the one hand, it is because of the unsupported policy, and on the other hand, because of the emergence of Bitcoin Cash, the two currency technologies are incompatible, resulting in a serious plunge in the price of Bitcoin.
In December 2017, the price of Bitcoin reached its peak and once exceeded US$20,000. Many people could not help tempted to enter the Bitcoin trading market. In January of this year, the price of Bitcoin plunged. Blind investment has caused huge economic losses. 2018 was a year when the price of Bitcoin plunged. The lowest price touched around $3,400. From December 17th to December 20th, the price of Bitcoin rose, and the current price is 4065 Near the U.S. dollar, there were four consecutive yangs, and the price rose by about $600 for four consecutive days.
What is the reason for the price plunge this year? Let’s talk about the reasons for Bitcoin’s plunge.
1. The policy is not supported. At present, Bitcoin has not been popularized in the world. my country’s attitude towards Bitcoin is a restriction. There is no corresponding policy to protect the transaction and development of Bitcoin. In addition, the US Securities and Exchange Commission has imposed some penalties for illegal cryptocurrencies.
2. There is a hard fork in technology, Bitcoin Cash appears, and the two currencies are technically incompatible, resulting in a serious shrinkage of Bitcoin.
3. Investor sentiment is low. Bitcoin price has been in a sideways phase from September to November. Investors lack confidence in the market, transactions are flat, and new funds injected into the market are gradually decreasing.
The above are the reasons why the price of bitcoin plummeted. Of course, there are other factors. There are great risks in the bitcoin trading market. Do not enter the market blindly, and you must learn professional knowledge.

㈤ Why did Bitcoin fall so badly

Because the essence of currency is credit, just like we use RMB to buy things because the Chinese government issues it, and Bitcoin does not, His rise was originally a hype

㈥ Bitcoin had soared before, why did it fall faster?

At the same time that the price of Bitcoin accelerated, it also experienced a faster decline callback.

According to the price of bitcoin news information website Coindesk, on January 11, the price of bitcoin once fell to around $30,305, down 27.78% from the all-time high of $41,962. In other words, the price of Bitcoin fell from $40,000 to $30,305 in just over a day. Previously, it took Bitcoin 6 days to rise from $30,000 to $40,000.

From the perspective of the macroeconomic environment, Yu Jianing believes that the callback on January 11 can be regarded as a hedging measure taken by overseas mainstream investment institutions. He believes that one of the reasons for Bitcoin’s rise this year is the continued decline in the U.S. dollar index. At present, the Biden administration is about to take office. “Everything that is bad is good.” The dollar may rebound. Global commodity assets have experienced a sharp correction, and the digital asset market has also adjusted accordingly.

In recent days, the US dollar index has risen significantly. As of press time, the US dollar index is about 90.49, down 0.06 from the previous day and up 1.16% from the closing price of 89.42 on January 6.

He also pointed out that many Bitcoin miners choose to sell at relatively high prices. From the data of cq.live, the miners’ position index (MPI) has hit a high this year. The MPI index is higher than 2, indicating that miners tend to sell Bitcoin after mining; if the MPI is negative, it indicates that they are optimistic about the short-term trend and choose to hoard Bitcoin. The current value is around 5.26, indicating that miners are selling bitcoin in the over-the-counter market or on exchanges. In addition, data from ByteTree also shows that in the past week, Bitcoin miners dug a total of 6,894 bitcoins, but sold 10,047 bitcoins, which means that miners sold nearly 3,153 bitcoins in stock.

Yu Jianing mentioned that another reason for the drop was that trading platforms such as Coinbase, the largest compliant exchange in the United States, experienced website downtime after severe market fluctuations, and users’ transactions were delayed. Many buy orders could not be traded normally, which also caused the bitcoin price on the website to be far below the market price, further exacerbating market panic.

“Because of the failure of the coinbase system, yesterday, I could only sell but not place buy orders, and buy orders could not be filled. The entire trading world order was destroyed.” A currency circle practitioner also said.

Regulatory warns against Bitcoin volatility risk

It is worth noting that the recent ups and downs of Bitcoin have also aroused the vigilance of regulatory authorities in various countries.

January 12, according to the New Zealand Herald.New Zealand’s Financial Markets Authority (FMA) has issued a warning warning New Zealanders to be cautious about investing in cryptocurrencies.

“New Zealanders considering purchasing cryptocurrencies such as Bitcoin should be aware that they are high risk and highly volatile assets,” a spokesperson for the New Zealand Financial Markets Authority said. Regulated, scammers and hackers often take advantage of cryptocurrencies.”

And the UK is also strengthening the regulation of cryptocurrencies. According to a report by The Times on January 9, HSBC decided to stop providing encryption to customers in the UK. Currency trading services, including prohibiting customers from depositing funds from digital wallets to HSBC. Meanwhile, many other UK banks have banned customers from using credit cards to buy digital currencies such as bitcoin.

“Virtual currencies represented by stablecoins are facing increasingly complex compliance risks. As more and more economic activities migrate to the blockchain, the industry is facing great compliance pressure The issuance of stablecoins such as USDT has exploded in 2020, hitting a record high. Behind this, part of the demand for use comes from compliant normal transactions, but there are also black and gray needs with problems such as money laundering and illegal financing. , the blockchain industry will encounter more and more compliance challenges in the future.” Yu Jianing said.

He pointed out that the 2020 annual virtual currency anti-money laundering report released by PeckShield shows that the value of unregulated outbound virtual currency in 2020 will reach 17.5 billion US dollars, an increase of 51% over 2019, and is still growing rapidly. Fraud cases involving virtual currency continued to occur, reaching 151, an increase of 655% over 2019.

Yu Jianing said: “Beginning in the second half of 2020, fraud, attack, extortion, gambling and other industries, as well as money laundering, running points and other gray products, began to be transformed into virtual currency money laundering and extortion cases. Growth, the virtual currency anti-money laundering situation is severe, in 2021, the blockchain and digital asset industry must adopt a more stringent and prudent KYC (know your customer) review mechanism and implement stricter anti-money laundering standards.”

㈦ Bitcoin has already exceeded 50,000. Why is the price of the currency rising so fast?

In recent years, the economy has been under great downward pressure, and the global economy has slowed down significantly. In this case, people tend to buy investment products that preserve their value, rather than investing their money in consumer goods or production. And Bitcoin is a good place to invest.
As mentioned earlier, the number of bitcoins is constant and not controlled by a central authority, which means that bitcoins have good reliability. In addition, Bitcoin can be invested through the Internet, and the threshold for traditional investment products is relatively high, so the speed of capital entering Bitcoin is particularly fast. The price of Bitcoin has been unstable, which is also related to the fast in and out nature of the Internet. And the current economic situation is prompting a rapid flow of capital into Bitcoin.
Due to the great downward pressure on the economy, in order to prevent capital outflow and ensure exchange rate stability, all countries have adopted a certain degree of foreign exchange control measures. For example, my country has adopted relatively strict RMB foreign exchange control. If you want to exchange RMB into US dollars, there are many restrictions. Ordinary people can only exchange 50,000 US dollars per year. At this time, Bitcoin became a means of bypassing foreign exchange restrictions.

The transactions between bitcoins are difficult to monitor, but the bitcoin trading platform can be monitored. For example, if your trading platform is a Chinese website, it will naturally be regulated by China. At the beginning of this year, due to the intervention of the regulatory authorities, the three major bitcoin trading platforms in China suspended the withdrawal of bitcoin, and bitcoin fell sharply. But in June, these bitcoin exchanges resumed their withdrawal services, claiming to have completed the upgrade of their anti-money laundering systems. This is good news for Bitcoin, and it makes sense for the price of Bitcoin to rise.

㈧ Why Bitcoin suddenly plummeted today

On the one hand, it is because the policy does not support it, and on the other hand, because of the emergence of Bitcoin Cash, the two currency technologies are incompatible, resulting in Bitcoin Coin prices plummeted.
【Expanded information】1. Many novice investors are often attracted by the high profits of Bitcoin and cannot control the invested funds well. Important inputs such as education and medical care flow out, and the remaining idle funds can be considered for inclusion in the field of bitcoin investment, and choose to seize the opportunity to enter the market based on market conditions. Doing so can effectively avoid the all-or-nothing gambling mentality, control the cost of investment, and avoid losses caused by risky investments.
Second, Skills Two, stay firm, don’t be half-hearted. Investing in Bitcoin is a protracted battle. Because of its unique characteristics, Bitcoin only needs time to be bullish for a long time. Therefore, when the market trend chart and technical operating system show short-term market fluctuations, investors need to remain rational andYou don’t have to buy or sell with most people, you should choose to stick to it and believe in the long-term value of Bitcoin.
Three, skills three, choose the appropriate trading platform. Buying Bitcoin and choosing a suitable trading platform is crucial to success. As an old driver who has been in the currency circle for a long time, the following points are personal experiences in choosing a Bitcoin trading platform for many years, for reference only: Word of mouth and technical strength; how much the platform has registered capital; how professional the team of 3 units is; the current transaction volume and number of people on the platform;
Fourth, in order to avoid risks to the greatest extent, the European trading platform is the first thing to do when trading Bitcoin.
5. Bitcoin (Bitcoin) is a virtual cryptocurrency based on decentralization, using peer-to-peer network and consensus initiative, open source code, and using blockchain as the underlying technology. It was proposed by Satoshi Nakamoto in 2008 , born in 2009, the biggest difference from other virtual currencies is that its total number is very limited and it has scarcity.
6. Unlike all currencies, Bitcoin is not issued by a specific currency institution. It is generated by a large number of calculations based on a specific algorithm. The Bitcoin economy uses a distributed database composed of many nodes in the entire P2P network to confirm and record. All transaction behaviors and the use of cryptographic design to ensure the security of all aspects of currency circulation.
7. The global financial crisis broke out in 2008. On November 1, 2008, a person calling himself Satoshi Nakamoto published the Bitcoin white paper “Bitcoin: A Peer-to-Peer Electronic Cash” on the P2P?foundation website System”, stating his new vision for electronic money – Bitcoin was born. On January 3, 2009, the Bitcoin genesis block was born.
On January 5, 2009, Bitcoin, which is not controlled by the central bank and any financial institution, was born. Bitcoin is a digital currency consisting of a string of complex codes generated by a computer. New bitcoins are made through a preset program. Reached the total cap of 21 million.

㈨ What is the reason for Bitcoin’s fall?

Bitcoin is like a stock. If it rises for a long time, it will inevitably fall, and if it falls for a long time, it will inevitably rise.

㈩ Reasons for the crash of Bitcoin

The reasons for the crash of Bitcoin:
1. Behind this, the listing of Coinbase is the biggest help. However, the market’s frenzy may have been one of the “killers” of Sunday’s slump — people over-excited at first and eventually paid the price. Perhaps as Galaxy Digital founder Michael Novogratz tweeted: In hindsight, the (fall) was inevitable. The market is too excited for a direct listing on Coinbase. All of these signs suggest that the market is too one-way. Other market participants believe that the collapse of the digital currency may also be related to another thing that happened to Coinbase – a few days after the listing, company executives cashed out on a large scale. A previous Wall Street News article said Coinbase insiders sold a total of 12,965,079 shares, based on Friday’s closing price of $344.38, according to data from Capital Market Laboratories and confirmed by documents on the Coinbase Investor Relations website. valued at nearly $4.5 billion.
2. Analysts believe that weekends are usually days of disaster for digital currencies, and the slump that has just occurred may be related to three factors: First, Turkey has imposed a ban on encrypted payments from April 30, and Coindesk expects India and Morocco to also The introduction of similar policies; second, the digital currency trading platform Coinbase, which has just been listed soon, was sold by executives, cashing out nearly 300 million US dollars in stocks; third, it was reported that the US Treasury Department will accuse a number of financial institutions of using cryptocurrencies for money laundering.
Extension information: Bitcoin (BitCoin) is a digital currency in the form of P2P. Peer-to-peer transmission means a decentralized payment system. Bitcoin is not issued by a specific currency institution. It is generated through a large number of calculations according to a specific algorithm. The Bitcoin economy uses a distributed database composed of many nodes in the entire P2P network to confirm and record all transaction behaviors. The decentralized nature of P2P and the algorithm itself can ensure that the value of the currency cannot be artificially manipulated by mass-producing Bitcoin. The cryptography-based design allows Bitcoin to be transferred or paid only by the true owner. This also ensures the anonymity of currency ownership and circulation transactions.

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