While cryptocurrencies can be volatile at the best of times, the market as a whole took a hit today. Here’s what happened to Bitcoin, Ether and Doge.
While the cryptocurrency market can be volatile at the best of times, the value of Bitcoin, Ether and Dogecoin took a greater hit than usual today. Generally speaking, individual cryptos can often fall quickly, but others tend to rise at the same time. When many all take a plunge at the same time, it is usually an indication that something more fundamental happened to the industry. This was exactly the problem today.
Cryptocurrency is still an emerging market and with this being one people can invest in, the value of a crypto can fluctuate wildly. Not to mention, new cryptocurrencies are surfacing all the time. For example, while Bitcoin and Ethereum are commonly referenced and more universally known, Dogecoin has proved to be a popular talking point of late, partly thanks to Elon Musk. The Tesla and SpaceX CEO has recently been quite vocal on cryptocurrency, with most recent comments on social media appearing to indicate a favoring of Doge over Bitcoin. Combined with recent announcements by Tesla and SpaceX, the value of both coins have been affected recently.
Today, the cryptocurrency market as a whole took a hit. Often considered the most reliable, Bitcoin was noted dropping as low as $30,000, according to CoinDesk. Likewise, Ethereum dropped below $2,000 while Dogecoin sank to under 24 cents at one point. Since the initial and sudden drop, all three have rebounding once again, although all of them are still currently trading a little under where they were one day ago.
What Caused The Universal Drop?
The sharp Bitcoin, Ether, and Dogecoin decline seems to be directly tied to events in China. As Reuters reports, China has effectively banned financial institutions from trading and/or providing cryptocurrency-related services, as well as even accepting it as a method of payment. The People’s Bank of China ban was part of a wider move to warn investors against crypto trading. As to be expected, such a wide-ranging damnation by a country as significant as China would have an effect on any industry, with cryptocurrencies no exception.
The events over recent weeks and months have seen a flurry of activity within the cryptocurrency market and such activity is probably not ideal for a market that’s already considered to be volatile. Although quick changes in value can appeal to some investors looking for a quick return, markets tend to prefer stability. That appears to be the case here, with China’s decision somewhat based on the current unpredictability of the market and concerns over how easily it can be manipulated. Whether China reverses its recent cryptocurrency decision in the future remains to be seen, but if recent events are anything to go by, this is unlikely to be the only major fluctuation the cryptocurrency market encounters.
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