Crypto Crash: Bitcoin hits 99 day low, is this payback time?
Bitcoin is HODLing (Hold for Dear Life) even as anxious punters seem likely to sell the farm in what looks like the worst crash for the cryptocurrency.
On Thursday, May 20, the price of a Bitcoin plunged below the $40,000 mark -- a 99 day low. BTC crossed the $40,000 mark on Feb 10 2021.
The BTC's recent slide has been attributed majorly to a supporter turned foe and the new regulation in China.
Elon Musk, a former supporter turned foe, tweeting a snapshot of Tesla suspending vehicle purchase using Bitcoin and rattled the BTC counter by a margin of nearly 20 percent in two days.
A renewed Chinese guideline spooked Bitcoin prospects. Three Chinese financial industry associations, including the People's Bank of China have reportedly asked their members (mostly financial and payment firms) to desist supporting cryptocurrency transactions. With this, Initial Coin Offerings (ICOs) and exchange related transactions have been disrupted but individuals are free to hold such cryptocurrencies.
The People's Bank of China statement widely circulated on WeChat stated that cryptocurrency was not real currency, "should not and cannot be used as currency in the market."
Traders and experts however believe that China's loss could be anybody's gain. After all, the cryptocurrency has delivered a whopping 300 percent gain in the last decade. Traders also point out that exchanges sensing regulatory pressure could switch to countries such as Romania and other locations that offered cheaper electricity and a regulation-free environment.
While the BTC remains no stranger to extreme volatilities, its supporters seem to be in the dark about its future. For now, there seems to be far more challenges than just the new Chinese regulation. According to reports, Washington is likely to deliberate on the merits of cryptocurrencies and its trading soon.
Cartoonist: Satish Acharya
Text: Sify Finance Desk