Why Cryptocurrency is Crashing?
The coming crash of Bitcoin? What is going on in the markets? Hopefully, this article will explain why the price of Bitcoin, Ethereum, Dogecoin, and all the other cryptocurrencies is falling. Bitcoin fell around 20% this week so far, and for people that are new to crypto, which is a lot this year, it’s a scary time. Trust me when I say I know how that feels; losing $100,000 in a matter of a few days can be terrifying, but hopefully, if you read this article all the way through, you will get a better understanding of what’s going on.
Reasons why Cryptocurrencies including bitcoin is Crashing
Reason 1: Elon Musk doing Elon does best – tweeting, here’s what he said “Having some Bitcoin, which is simply a less dumb form of liquidity than cash, is adventurous enough for an S&P500 company….To be clear, I am *not* an investor, I am an engineer. I don’t even own any publicly traded stock besides Tesla. However, when fiat currency has a negative real interest, only a fool wouldn’t look elsewhere. Bitcoin is almost as bs as fiat money. The keyword is ‘almost’.
Here’s the thing. There’s plenty of assets Elon could have bought that would have given him arguably the same amount of liquidity – but he didn’t – and he certainly didn’t buy Dogecoin with it so he must not think it’s that BS. So what’s going on? Here’s what I think: if there’s one thing I’ve noticed across the board, and this doesn’t matter if you’re rich, or smart or if you’re Elon Musk – the longer you invest in Bitcoin, the more it starts to make sense.
Just like Elon said, he’s not an investor, he’s an engineer, which means perhaps he doesn’t understand all the aspects of the technology and game theory that’s behind Bitcoin. I know Elon is probably the smartest person on Earth but it seems like he’s still missing a key element of Bitcoin, maybe he still has questions regarding how Bitcoin will scale, maybe the jury is still out on Bitcoin’s expensive fees as a currency, or the wastefulness of it, whatever his hang-up is, he’s still getting comfortable with it and perhaps it hasn’t quite clicked with him yet.
Reason 2: A guy by the name of Peter Schiff quoted Elon on Twitter “even Elon thinks Bitcoin is as BS as Fiat money”. Peter is the chairman of Schiff Gold where he sells people digital gold as investments. So obviously he has an incentive to sell gold, that’s how he makes his money. Elon responded, “An email saying you have gold is not the same as having gold. You might as well have crypto. Money is just data that allows us to avoid the inconvenience of barter. That data, like all data, is subject to latency & error. The system will evolve to that which minimizes both.”
Elon is right, that’s the whole strength of gold is that it’s tangible, it’s physical, no one can take it away from you or manipulate it if you own the physical asset which let’s face it – most people don’t. Otherwise, it’s no different than owning Bitcoin. But then here’s the tweet that really dropped the price – he goes on to say “That said, BTC & ETH do seem high lol”.
Reason 3: Janet Yellen criticized Bitcoin saying it’s used for illicit activities, it’s not efficient and people should be careful speculating.
Reason 4: Tether and Bitfinex were banned from trading in NYC. The New York attorney general said that tethers were not fully backed at all times and they were fined $18.5 million. Tether and Bitfinex responded saying that they admit no wrongdoing in anything and that when it boils down to it, it’s just a matter of disclosure and transparency.
My thoughts: this is what Bitcoin does, there’s hype, the price goes up then someone from the government criticizes it, the price falls. However, 30-40% pullbacks in the market are healthy and it’s business as usual. If anything, it’s great to see some clarity on Tether which isn’t as bad as investors previously thought.
Source: (Video and Text Taken from Andrei Jikh YouTube Channel: Click Here For his Channel)