The Reasons Behind The Decline in The Market Value of Digital Currencies
In the recent period, digital currencies have witnessed a great fluctuation in the prices of their market value, especially Bitcoin, which achieved its highest level, which reached 64 thousand US dollars, before it recorded its lowest level in its market value last May, which reached 37 thousand. US dollars, after Elon Musk tweeted it on his personal account in which he declared to stop selling his electric cars through Bitcoin, and through the following lines we will show you the reasons and all the details that led to the decline of Bitcoin, so follow us.
Contents
1 Reasons for the depreciation of Bitcoin
2 Therefore, the reasons for the decline of Bitcoin are:
3 Bitcoin
4 Governments position on Bitcoin cryptocurrency
5 bitcoin token
6 Will bitcoin prices recover
Reasons for the decline in the value of Bitcoin
Digital currencies recorded their lowest level with the beginning of 2022, after Russia announced that it would stop trading or mining digital currencies, and as a result of what Russia announced, the market value of cryptocurrencies in general, and Bitcoin in particular, declined, and this is evident from the market value that it achieved, which up to 1.83 trillion US dollars.
As we mentioned, Bitcoin has had the largest share of decline since Russia announced its new proposal. On Friday, January 21, 2022, Bitcoin recorded its lowest level, which is less than $40,000. This price is the lowest price Bitcoin has reached since 2021 in July.
It is known that the Bitcoin currency has the highest market value in the world among all other cryptocurrencies. The reason for this is that it was traded around $38,812.99.
There is no doubt that the decline in the market value of Bitcoin will result in instability in the market value of other encrypted digital currencies.
Therefore, the reasons for the decline of Bitcoin are:
*. The proposal made by the Russian Central Bank, which came on Thursday, January 20, 2022, which included a ban on dealing with digital currencies as well as stopping their mining, and this decision resulted in a lot of losses in Bitcoin Btc, which is the most famous currency in the world, in addition to a decline its own market value.
There has also been a lot of fluctuation in the market value of various digital currencies as a result of the drop in the price of Bitcoin.
It is worth noting and something that cannot be overlooked that Russia is the largest country mining bitcoins in particular. And digital currencies in general, all over the world.
*. The decision announced by the President of the United States of America, Joe Biden, regarding taxes amounting to 43.4% on capital gains, which resulted in a decline in the market value of cryptocurrencies, and this decision caused the elimination of 200 billion US dollars from the market value of cryptocurrencies , according to data from CoinMarket.
*. The tweet by Elon Musk, in which he stated to stop selling electric cars to his Tesla company through the digital currency Bitcoin, and he disclosed some of his reasons, which is the significant decline in the market value of Bitcoin, through which he confirmed that Tesla may sell everything it owns. bitcoin.
*. China announced that it banned financial institutions and payment companies from providing services that can be dealt with in encrypted digital currencies, and that decision was last May, in addition to that it warned investors against speculation in digital currencies, and Bitcoin retreated at that time in its market value to less From 40 thousand US dollars.
Bitcoin
It is one of the most important digital currencies that gives its owner a high degree of protection as well as security. In addition, it cannot be forged or dealt with more than once. The reason for this is that it uses a high technology called (Blockchain). Which works to provide reliability and confidentiality greatly, and this technology is a decentralized network that cannot be hacked in any way and cannot be monitored.
Bitcoin is a currency that is dealt on the Internet from one person to another in a direct way in transactions between participants of the same level who are on the network, without the intervention of an intermediary in order to facilitate operations or allow transactions.
The government’s position on the Bitcoin cryptocurrency
Despite the power of the Bitcoin digital currency, many governments refuse to recognize it. The reason for this is that it does not allow investors to track the movement of funds through the Bitcoin network. Hence, it does not let the government know who has that much money. Or who transferred a measure of money and to whom? All of these matters are important for any government in order to ensure the safety of financial rights and their systems from thieves and criminals.
Bitcoin symbol
Each digital currency has its own symbol, for example, Bitcoin is symbolized by a square symbol. While the US dollar is symbolized by $, and the euro and the pound sterling are symbolized by a special symbol for each currency.
Will Bitcoin prices recover?
Undoubtedly, everyone knows that Bitcoin and other cryptocurrencies are inherently volatile. And the Bespoke Investment Group said that the level of decline is at its highest level, close to 50%. It reaches 69% on the rest of the trading days over the past year. Bitcoin’s market capitalization has fallen by more than 40%. It is higher than its standard level without the rest of the other digital currencies.
Despite all this, bullish investors are strongly defending the continuation of investors in the long term, or for companies to offer original shares to them before getting rid of cryptocurrencies.
Over the past 11 years, Bitcoin has been exposed to more than 750 cases. In which prices were changing on a daily basis by up to 5% or more.
Konstantinboikur Womanovsky, CEO of AllNodes, wrote a comment to his email. In which he states that a correction in the cryptocurrency market is common. However, there is a decline in the market value of currencies in their respective markets.
There is no doubt that the past performance and market value of Bitcoin and its continuous decline and volatility does not guarantee future results. It is the reason behind the defense investors to stick to it. and the defense of long-term equity investing in cryptocurrency and similar investments.
Previously, we provided you with everything related to the decrease in the price of the market value of the encrypted digital currency Bitcoin. And the reasons that led to the decline in the value of Bitcoin, and we would like to have provided you with all the information you want to know about this topic.