The drastic fall of Bitcoin has taken the world by storm, even trending on popular social network Twitter, just days after hitting a record high. The world’s most common digital coin plummeted over 30%, its biggest fall since February 2021 and similar to the crash of the coin in 2018.
Of the countries feeling the heat is Nigeria as her citizens are among the leading traders and investors in crypto currency, even after the Central Bank of Nigeria dissociated herself and financial bodies in the county form the world of Crypto.
All over social media, Nigerians have been stating their agitations over this fall, as many are seeing their investments in millions crash, generating losses. Some experienced traders said it is expected and there is no need to fret. However, many newbies who have pumped lots of cash into the market are having sleepless night, no thanks to this fall, which has also affected other coins.
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The plunge of Bitcoin made other crypto currencies to also plunge. According to Coinbase Metrics, Ether, the digital currency that powers the Ethereum blockchain was down 34% at $2,218. Sadly, Dogecoin, a cryptocurrency that started as a joke after being influenced by Musk’s tweet, fell 44% to about 26 cents. This fall in other coins have also added to the reasons Nigerians are agitated.
Why is Bitcoin falling?
- The US Teasury speculation
The plunge in the world’s most popular digital coin came after reports stated that the U.S. Treasury may take action against money laundering that’s carried out using digital assets, according to Bloomberg. - Elon Musk’s influence
On May 12, Tesla CEO Elon Musk said his car company had suspended vehicle purchases using bitcoin, citing environmental concerns over the so-called computational “mining” process. He announced that Tesla would reverse plans to accept bitcoin as payment for its cars. He stated that the mining process of the coin isn’t environmental friendly.Musk’s comments caused over $300 billion to be wiped off the entire cryptocurrency market that day.“Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment. Tesla will not be selling any Bitcoin and we intend to use it for transactions as soon as mining transitions to more sustainable energy.”
Elon MuskElon Musk has shown to be a big influence in the crypto space after his Tweet saw surge in the price of Dogecoin , now the fall of Bitcoin.
- Countries resistance to using Crypto currency:
Bitcoin had already been under pressure in recent days after financial security agencies of some countries have restricted their countries from trading crypto currency. It fell more than 4% when Turkey’s central bank banned the use of crypto currencies from the end of April, saying crypto payments came with “significant risks.” India is also reportedly set to propose a law banning cryptocurrencies, fining anyone trading in the country or holding such digital assets.Lately, Chinese Government on Tuesday 19 May 2021 banned financial institutions and payment companies from engaging in crypto currency related transaction. This affected bitcoin again as the coin plunged below $40K.
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Hope for All?
In September 2018, cryptocurrencies collapsed 80% from their peak in January 2018, making the 2018 cryptocurrency crash worse than the Dot-com bubble’s 78% collapse. By 26 November that year, Bitcoin also fell by over 80% from its peak, having lost almost one-third of its value in the previous week.
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The fall of 2021 isn’t a new thing and we might be seeing a rise soon in the price of Bitcoin. This is one reason Nigerians should be relaxed and just watch how the market will return to its good state.
This is why experienced investors and traders always admonish newbies that:
- Crypto isn’t a get-rich quick scheme.
- You invest with cash you can afford to lose because there will be seasons the coins will fall called the bearish season.
- HODL: Crypto is a long term investment, so buy coins and ‘hold for long’.
- When the market is bearish, BUY THE DEEP.
- Learn before trading
Will Bitcoin rise again? The days ahead will show. For now, traders and investors agitated , all have good reasons to be.
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