Behind The Bloodbath

The recent market movement has stirred up uncertainty and skepticism in the cryptocurrency industry. The price of bitcoin and other famous crypto assets have taken a bloodbath in the last few days causing great losses for investors and traders alike.

However, while a part of the market wallows in the harrowing experience, others are taking the occurrence as an advantage to anticipate future gains when the bull is up again. But what exactly is behind the recent bloodbath?

Thousands of crypto individuals who were affected by the dip infer that Elon Musk's influential tweets and Tesla's controversy are largely facilitators of the heavy price fluctuations. Tesla's decision to not accept bitcoin on its platform as payment for Tesla's electric cars, after announcing that it would, and Elon's tweet about Bitcoin's energy problems and possible risks to the environment, had sent the digital currency falling face first. That aside, a statement from China on Wednesday, contributed its bit to the dip season.

On Wednesday, a statement published on the Chinese Banking Association's website inferred that digital currencies are extremely volatile and should be avoided by financial institutions. Nearly every crypto currency in the market plummeted following the joint statement from the industries. Bitcoin was down by over 7% at around $40,310 per coin on Wednesday and most alternative coins lost between 7% and 22% of their value and shares of Coinbase dropped by more than 5%.

While it is not uncommon for the price of Bitcoin and Altcoins to plummet by thousands of dollars within a short while, price swings amounting to nearly $20,000 in 24 hours are considerably a little overboard.

The recent pullback has heightened the existing skepticism around Bitcoin and the crypto market. It is easier to see the price movements than the real value of Bitcoin and this is one major reason many institutions are staying away from the asset class.

However, it hasn’t stopped leading investors such as Square, MicroStrategy, and GrayScale, and others, from holding the asset class.

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