Bitcoin plummeted to $ 30,000, wiping out more than $ 500 billion from the currency’s peak market value.
Specifically, it has erased all the profits it made after Tesla’s February 8 announcement. In which he notified that he would use corporate cash to purchase the asset as a form of payment for his vehicles.
Certainly, according to the real-time trading site CoinMarketCap, Bitcoin sits at $ 37,500, far from the $ 58,000 it was trading at last Thursday. And even more than the record of $ 64,800 that it reached in mid-April.
Possible causes of Bitcoin’s crash
Indeed, fueling the volatility is Tesla CEO Elon Musk, whose statements on social media have whipped the crypto community.
To this end, Tesla would suspend car purchases with Bitcoin. Calling the recent energy consumption trends insane.
«Tesla has suspended the purchase of vehicles using Bitcoin. We are concerned about the rapid increase in the use of fossil fuels for Bitcoin mining and transactions.
Also, a statement from the People’s Bank of China, reiterating that digital tokens cannot be used as a form of payment.
For their part, critics had warned for weeks that the movements in cryptocurrencies were unsustainable. And that any sign of a sell-off would lead to defeat.
In this regard, Stephane Ouellette, CEO and founder of FRNT Financial said: “This will be the first day of welcome to cryptocurrencies, for many new entrants.”
He added: “The history of these assets has been plagued with aggressive rallies and unhealthy liquidations.”
Also, Ipek Ozkardeskaya, Senior Analyst at Swissquote in Gland, Switzerland said: “From a technical point of view, the indicators are flashing red. There is a possibility that we will see a pullback to these levels and even below. At least in the short term”.
Is there extreme fear, after eliminating $ 500 billion?
Despite the drop, some analysts find positive readings of data gleaned from Blockchain tracking and research.
We then have Willy Woo, one of the most recognized analysts in the cryptocurrency industry. Which shared a tweet showing that Bitcoin’s bull run is not over.
In any case, investor Raoul Pal warns that this is not a time to worry. According to his observations, the market value of Bitcoin will recover in the short term.
Very importantly, Pal notes that the price of Bitcoin is going through a correction that is perfectly normal and healthy. And for them he believes that it is time to buy or hold.
By the way, excellent news to withstand the fall of Bitcoin. Michael Saylor, he’s in control, now they’re acquiring over 111,000 Bitcoin and they aren’t going to sell.
Entities I control have now acquired 111,000 #BTC and have not sold a single satoshi. #Bitcoin Forever.
– Michael Saylor (@michael_saylor) May 19, 2021
So after the $ 500 billion loss of market value, all is lost for Bitcoin? Leave us your opinion in the comment box.
I close with this quote from Ulrik Lykke: “Cryptocurrency markets are extremely emotionally driven. And its participants are prone to overreact to events they perceive as negative.
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