In a short span of time Bitcoin price has earned reputation as the most volatile digital currency of all time. The cryptocurrency, which traded around $7,000 at the beginning of 2020, peaked at $64,829 in mid-April. Since then, it has fallen below the crucial $30,000 mark for the first time since June 22. The price of Bitcoin declined over 6% to $29,671, its lowest since January 27.
The digital cryptocurrency has had quite a year, falling from record highs of less than 50 percent of its former glory. The plunge in Bitcoin price came after a massive sell-off in global markets. While a surge in COVID-19 infections is one of the reasons, analysts believe there are many factors to blame.
Why is Bitcoin Price dropping?
China’s Miner Exodus: This year’s crash was caused by the Chinese government’s “crack down on Bitcoin mining and trading behavior,” according to the statement, as translated by the South China Morning Post. That’s a big deal for crypto enthusiasts as China accounts for 65 percent of Bitcoin mining globally, according to Coindesk. Many believe that China’s crackdown on cryptocurrencies could be seen as a way to wipe out the pathway before it launches its own digital currency. The move had a significant effect on the value of popular cryptocurrencies like Bitcoin and Ethereum. With China out of the picture, the future of cryptocurrencies that rely on industrial-scale mining is starting to look bleak.
Elon Musk Dumps Bitcoin: Crypto enthusiast and Tesla CEO Elon Musk played the devil’s advocate, with the automaker first accepting Bitcoin as a form of payment, only to reverse the decision a few months later. Musk announced that due to long-brewing environmental concerns over the carbon footprint of Bitcoin mining, Tesla was suspending customers’ use of the digital currency. The move was met with disdain by cryptocurrency advocates, who accused the CEO of ‘manipulating’ markets.
According to Fortune, Bitcoin’s latest price drop is a landmark moment for the electric vehicle maker which made a mighty $1.5 billion investment in the digital cryptocurrency early this year, buying roughly 41,000 Bitcoin for the price of $32,000. It’s one more sign of Bitcoin’s volatile value.
The automaker’s gains have fizzled out despite a 10 percent selloff in April.
All in all, it’s one more sign of Bitcoin’s volatile value. The digital cryptocurrency may have gained acceptance in many circles, but it is not likely to make its mark as a dollar substitute anytime soon.
What is your Bitcoin price prediction for the end of the year?