After a volatile end of the cryptocurrency space in 2021, early January is facing a severe Bitcoin crash. While the price of Bitcoin was trading at nearly $50,000 just a month ago, digital currency prices across the board started to crash on January 5, 2022. Let us have a look at some of the crypto news today.
But a decline in the value of Bitcoin Rippled throughout major meme currencies alike, and the US Nasdaq stock exchange index trembled by plans to raise the interest rates of the US and also the political turmoil in Kazakhstan. This has been estimated by the researcher of Cambridge University which is the second largest home to crypto mining across the globe after the mining operations of China were clamped down in 2021.
Fears over the increase of interest rates of US and the impact of political turmoil and protests in Kazakhstan on the considerable mining operation of the nation appears to be the primary reason for this Bitcoin crash, as the crypto, as well as the traditional financial market, is still contended with coronavirus’s impact on the recovery of the global economy.
The price of Bitcoin has now decreased at levels that were last witnessed in last September 2021, which is now trading at approximately $41,917.96 at the time of writing this after the largest digital currency of the world increased to a record high of $69,000 on November 10, 2021.
The digital currency space was down by 2.3% in the past 24 hours as per a report by Coinbase on Friday. At that time, Bitcoin was down by 2%, Solana and Ethereum down by 6% and 5% respectively among 1000 cryptocurrencies.
Here are the reasons why the crypto space faced a severe Bitcoin crash in recent times.
Reasons For Bitcoin Crash 2022
One of the primary reasons behind the decline in the broader sell off for digital currencies that are fueled by concerns about stricter US monetary policies. The digital currency was trading at nearly $41,704 on the back of US payroll information driven by bargain purchasing, as per reports.
Other than the reason stated above, there are many other important factors that are boosting the Bitcoin crash which we have stated in this section.
The Internet Shutdown Of Kazakhstan
Another important reason behind the decline of Bitcoin prices is the blackout of the network in Kazakhstan. The nation has a fast-growing digital currency mining industry, and the closure of the internet of Kazakhstan is hurting the valuation of the digital coin.
Federal Reserve’s Aggressive Policy Action
The digital currency has also been under severe pressure after the US Federal Reserve meeting that spoke about taking more aggressive policy action, weakening investor appetite for riskier cryptos, as per a report. Matthew Dibb, COO of Singapore crypto platform Stack Funds said,
“We are seeing broad risk-off sentiment across all markets currently as inflationary concerns and rate hikes appear to be at the forefront of speculators’ minds.”
Multi-Million Dollar Bitcoin Scam In Pakistan
The Federal Investigation Agency of Pakistan has issued a notice to a famous cryptocurrency exchange when they were investigating about a multi-million dollar scam connected to fraudulent online investment mobile apps. According to an FIA Cyber Wing (Sindh) press release,
“An order of attendance has been issued to Hamza Khan, the general manager/growth analyst at Binance Pakistan, to explain his position on the company’s linkage to “fraudulent online investment mobile applications.”
When Was The Last Major Bitcoin Crash Took Place?
In June 2021, the Chinese government cracked down on many cryptos mining functions that were taking place in the Sichuan province and ordered that Chinese banks and payment platforms stop supporting anonymous and decentralized crypto payments.
This made the prices of Bitcoin to tumble below $30,000 in a dramatic shift from soaring success. The digital currency has continued to increase and also all as other administrations globally and the regulators mull legislation to prevent increased crypto activity often associated with crime or laundering. This Bitcoin June tremble was another major one in recent times. If you are wondering if I invest $1,000 in bitcoin today 2022, then it is the best time.
Conclusion
The price of Bitcoin enjoyed a bullish increase to near $70,000 in value in early November as investors aimed to witness the digital currency’s $1 trillion market capitalization remain steadfastly in place ahead of a fluctuating trading period. But it decreased below $50,000 in late 2021 as US and UK markets had to struggle to contend with renewed issues over Covid-19, the Omicron variant, and also high inflation. Along with this, there are several other reasons as well for this recent Bitcoin crash which has been discussed in this article.
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