In the last 7 days, the Cryptocurrency market has suffered a meteoric crash by going down by a trillion dollars. Currently, the Crypto market is valued at $1.5 Trillion which was about $2.5 Trillion a week back. Ethereum, one of the biggest Cryptocurrencies after Bitcoin has suffered a loss of 45%, while Bitcoin booked a loss of 40%. Crypto markets are suspecting that the cryptocurrencies have entered a bear market.
Cryptocurrencies are a decentralized currency which means they cannot be controlled by any country or people. This sets it apart from state-sponsored currency. However, it’s 100% speculative which makes these currencies really volatile.
In early February 2021, Elon Musk, the CEO of Tesla announced that the company will be accepting payment in Bitcoins. This fueled a huge change in the crypto market where the price of Bitcoin almost touched $60,000 in May 2021. But the CEO turned his back on the Cryptocurrency as he announced on May 13, 2021, that Tesla will stop accepting Bitcoin payments due to ‘Environmental concerns’
This created a huge impact on the CryptoCurrency as it booked a loss of more than $7,000 in a day. Bitcoin crashed by 10% while Tesla stock fell by 4%. This resulted in Elon Musk losing his position as the 2nd richest person in the world to Bernard Arnault. Musk’s net worth dropped by $3.16 billion.
Well, the following day Elon tweeted that Tesla is looking to improve another cryptocurrency called the Dogecoin to look like a potential payment. This again created volatility in the CryptoMarket where the price of Dogecoin increased by 20% within a day.
Three state-backed organizations – which include the China Banking Association – issued a warning that many took as signaling that the country could further regulate cryptocurrencies. This means financial institutions and payment companies are unable to provide cryptocurrency services, such as transactions, in China
The country warned against digital currencies and called it unreal.
It has also been suggested by a number of other regulators – including the UK – that they are looking closely at the usage and trading of cryptocurrencies. This could possibly lead to a number of issues for virtual currencies.
It has always been a rollercoaster when it comes to Cryptocurrencies. It’s a highly volatile market. However, experts have predicted that the market has entered a bear market. With the Chinese Govt. imposing restrictions, there could be other regulators to follow as well. Bitcoin had seen really high volatility this year where it reached an all-time high of $63,000 in Mid April to dropping down to as low as $39,000 as of today.
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But make sure you are not in Hungary or else be ready to pay extra for those packets of chips and bottles of soda!
Just like Mexico, Hungary has also introduced a Junk Food tax to promote a healthy lifestyle