Bitcoin goes down again, proving to everyone how volatile these cryptocurrencies really are. It isn’t much of an investment if all it takes to make bitcoin go down is a tweet from Elon Musk. Still, at the start of the year, it looked like bitcoin was going to shine this year with the currency reaching a high on April 14 at around $64,895.22. However, it fell to $32,601 as of yesterday.
This is almost a 50% decrease from the year’s high. It’s not only Bitcoin as well, with the number second cryptocurrency, Ether also dropping by 17% on Sunday. Ether is now valued at $1,905. It lost $391.31 from its previous close. The price hikes and drops are largely unpredictable, giving more traction to the claim that cryptocurrency is highly volatile. Things were looking up for bitcoin when Tesla announced that they would accept bitcoin payments.
Tesla has removed bitcoin as a form of payment, touting environmental concerns. They said that they would reconsider the currency after its effects on the environment are reduced. According to Amy Wu Silverman from RBC Capital Markets, “Many point to bitcoin’s volatility as untenable. Indeed, Bitcoin makes severe and dizzying swings”. Not to mention that the Bitcoin market operates 24/7 so the price drops can come at almost any time. Making it hard for people to make a sale before a big drop.
The drop also comes after China started cracking down on mining and trading Bitcoin. These efforts are part of an ongoing mission to prevent speculative and financial risks. According to Vice Premier Liu He, Chair of China’s Financial Stability and Development Committee, Bitcoin is an asset that needs to be regulated more closely. Cryptocurrency mining alone has brought China up to the number one place in the most carbon emissions this year.
Mining operations have hurt China’s efforts to reduce their emissions across the country. China has also banned financial institutions and payment companies from providing services related to cryptocurrency transactions. They have also warned investors against speculative trading of cryptocurrency. The ban came from three industry bodies namely: the National Internet Finance Association of China, the China Banking Association, and the Payment and Clearing Association of China.
It isn’t the first time that Bitcoin has dropped in its price but this time it seems to be because of a number of factors. Even the US Treasury Department reported new rules that would require crypto transactions over $10,000 to be reported to the Internal Revenue Service.
Well, it’s not like the Bitcoin crash is going to affect GPU prices much. Miners will just find another cryptocurrency to mine.