It seems that the value of bitcoin (BTC) is on a roller coaster ride. The share price of the digital currency rose to its record high of $ 19,346 last year. A few months later, BTC collapsed to $ 5.967 and lost over 69% of its peak value. The value has been shaky for a while now. He gets up every month and plunges into the same breath.
Bitcoin (BTC) Price today – BTC / USD
Why is BTC unstable?
Bitcoin is a currency, but is traded like a commodity. There is currently a limited supply of this digital currency and many investors and clients request it. Market forces are responsible for determining the price of bitcoin shares such as gold.
Why is the crypto market going down?
- Bad press: public currency perception is influenced by crash headlines and negative statements by financial institutions that question the currency's validity. An example of this effect is the 2017 event in which the CEO of JP Morgan threatened to dismiss any worker who invests in bitcoins in his investment bank. The digital currency has suffered a loss of 6% immediately.
- Inadequate security: To achieve stability, traders and consumers need a safe place to keep funds. Unfortunately, security issues affect trust and the use of bitcoins. Some noteworthy events occurred last year when two funds were robbed of their funds. Cyber-thieves have also stolen a lot of money from cryptographic exchanges.
- Strict government regulation: bitcoin is decentralized and has no central authority to regulate it. This allows users to avoid regular payment processes. It is attractive to many users because it means zero or central inflation. It also attracts cyber-thieves who love to steal without leaving a fingerprint. Governments have refused to adopt the currency because financial institutions and banks are worried about its ability to promote money laundering or commit crimes. At the start of this year, the Indian finance minister stated that cryptocurrencies would not be recognized as legal tender by the country. It will also discourage adoption due to widespread use in various illegal activities. Furthermore, Facebook requires cryptographic and bitcoin advertisers to go through a rigorous approval process. It also prohibited the publication of initial offers of coins.
- SEC's delay in the bitcoin ruling by the SEC: experts also believe that the approval of this fund could boost the value of BTC. The application was previously rejected due to the volatility of the digital currency. The delay has also affected other encrypted, not just BTC.