Over the past few weeks, there has been a constant fluctuation in the value of Bitcoin. In a recent turn of events, the price of Bitcoin plummeted by 29% on Wednesday, soon after the China Banking Association (CBA) issued a warning about the risks linked with digital currencies. A massive decline was observed in other cryptocurrencies as well.
Ether fell by more than 40% within a day, marking at $2000 at one point in time. On the other hand, the infamous Bitcoin went below 10% in the early hours of trading, losing almost 40% of its value since April 13 when it hit an all-time high worth of more than $64,606 per coin.
These unanticipated changes aren’t much of a surprise for crypto-enthusiasts. The price of these currencies will soar high in the sky and plunge to a massive decrease in value. However, crypto and market experts told CNBC that this is just how the crypto market operates and traders should just get used to it.
The sudden volatility of Bitcoin can be attributed to various reasons apart from the CBA’s warning. Before Wednesday, the value of Bitcoin had seen a monumental low point due to Tesla’s decision to decline any cryptocurrency payments for cars. This was also coupled with increasing regulations on cryptocurrencies that affected the overall value of Bitcoin. Irrespective, the price of digital currency is still higher by 31% in 2021 and approximately 300% as compared to last year.
It is important to note that the price of Bitcoin can change within seconds. Statistics prove a significant change in the value of the currency from last year to the present. In December 2020, Bitcoin closed under $30,000; Just 4 months later, the currency had skyrocketed to a value worth $65,000. After reaching a new high, Bitcoin’s value has oscillated from sudden highs to swift lows.
Despite numerous speculations about Bitcoin, several companies have been using digital currency for various purposes. Square, the digital payment organization chaired by Jack Dorsey, also the CEO of Twitter has been a major advocate of Bitcoin. Moreover, Overstock.com also receives Bitcoin as payment, and just recently, BNY Mellon, the oldest bank in the United States has announced to add digital currencies to the services it offers. Even Mastercard has declared colossal support for the currency and confirmed that it would be supporting “select cryptocurrencies” through its network.
As of right now, Bitcoin along with other cryptocurrencies have reached new heights of popularity. According to data provided by blockchain.info, more than 300,000 transactions are common on a normal day. However, in comparison, its popularity has still not reached the same levels as that of cash and credit cards.
In spite of the phenomenal growth in the cryptocurrency market, officials are now starting to consider stricter regulation of digital currencies. Washington officials are in the process of monitoring these markets, citing that an additional influence might be in play for the recent rise in the value. Gary Gensler, chairman of the Securities and Exchange Commission has said that cryptocurrency markets are likely to be in a better place when investors are protected.
