BIC’s Video News Show: Bitcoin Crash

Share Article
In Brief
  • Crypto markets tanked in the past few days, losing between 10% and 30% of their value in 48 hours.

  • The more direct cause was Chinese authorities banning banks from dealing with cryptocurrencies.

  • But this only exacerbated a situation caused by Tesla dropping payments in bitcoin.

  • promo

    BIT Launchpad: Up To 3,500 FREE BIT. Don’t Miss The Beat. Join Now!

The Trust Project is an international consortium of news organizations building standards of transparency.

In this episode of the BeInCrypto video news show, host Jessica Walker will address Bitcoin’s recent crash. We will look at its causes, including China’s recent crypto ban, and Tesla dropping bitcoin (BTC) payments, then discuss what could be next.

Sponsored



Sponsored

Bitcoin and crypto crash

What started as a dip last week, after Tesla’s decision to no longer accept bitcoin as payment, has now turned into a crash. The most popular cryptocurrency and almost all others lost anywhere between 10% and 30% of their value in a space of 48 hours.

But the trigger for the meltdown yesterday came from a decision made in China. Chinese authorities ordered financial institutions and payment companies to cease providing services related to crypto transactions citing crypto’s speculative nature.

Sponsored



Sponsored

China ban

So what have authorities in China decided in its latest attempt to clamp down on what was a burgeoning market? Under the ban, institutions, including banks and online payments services, must not offer clients any service involving cryptocurrencies. This includes registration, trading, clearing, and settlements. People are still allowed to own crypto, but they can’t do anything with it now, with this ban in effect.

“Recently, cryptocurrency prices have skyrocketed and plummeted, and speculative trading of cryptocurrency has rebounded, seriously infringing on the safety of people’s property and disrupting the normal economic and financial order,” the statement said.

These were not Beijing’s first moves against digital currencies, though. In 2017, China shut down its local cryptocurrency exchanges, smothering a speculative market that had accounted for 90% of global bitcoin trading.

Tesla and bitcoin

This bad news for crypto adoption came in the wake of Elon Musk’s decision last week to stop Tesla accepting bitcoin as payment, and seems to have compounded its effect.

Elon did tweet that “Tesla had diamond hands” and wasn’t selling, but a quick check shows that the bitcoin price dropped to the level at which Tesla bought in.

The fall caused major crypto exchanges like Coinbase and Binance to temporarily go down, flooded with requests for withdrawals. Although strewn among them were probably some deposits from those that wanted to buy the dip.

What next?

This was the single largest daily candle on the bitcoin chart, decreasing 30% in a single day. And it’s fair to say that many people might be spooked right now.

It wasn’t the largest percentage move, but still, this is a huge change, especially with the rally that has been going on for so many months. We did see a quick rebound to $40,000, where we’re trading at the time of recording, and bulls will be looking at a critical level at $42,198, as a sign for a fast recovery.

But sharp moves in both directions are often followed by opposite whipsaw moves, so prepare yourselves for some more volatility.

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
Sponsored
Share Article

Nick is a data scientist who teaches economics and communication in Budapest, Hungary, where he received a BA in Political Science and Economics and an MSc in Business Analytics from CEU. He has been writing about cryptocurrency and blockchain technology since 2018, and is intrigued by its potential economic and political usage. He can best be described as an optimistic center-left skeptic.

Follow Author

Market signals, studies and analysis! Join our Telegram Today!

Go

Bit2Me ICO JUST STARTED! Buy B2M token now.

Buy now!

BIT Launchpad: Up To 3,500 FREE BIT. Don't Miss The Beat.

Join Now!