5 Possible Reasons Why Bitcoin Is Plummeting

The beginning of 2022 was quite harsh for the crypto market. Although we ended the year of 2022 with great increases in the price of virtual coins, still within a month this situation has changed by 360 degrees. Investors, cryptocurrency traders, and miners were quite disappointed with the current state of cryptocurrencies. Many of them try to console themselves that this is a short and difficult period that has a chance to change in the future. They hope that if they invest even more in cryptocurrencies now, in the future this investment would be quite profitable. But, on the other hand, we have experts on this topic who do not have very positive opinions about the future of coins and the virtual stock market in general.

these experts can give us at least some answers, unravel the mystery of these events and explain a little better what lies behind this problem. Why does the value of this coin continue to decline? What are the reasons behind this happening? Is there anything that can positively affect Bitcoin and other cryptocurrencies, and finally can we enjoy a green wave, ie an increase in the value of currencies?

Today we will try to answer some of these questions and in some way give you hope that the future may be a little brighter in the world of cryptocurrencies.

Here are the possible reasons why the first coin is plummeting and continuing to drive the red wave:

1. Regulation by governments.

Source: coingeek.com

Although banks have no authority over cryptocurrencies, this does not mean that the state and governments can not pass laws that can control the people who invest, trade, and mine. Some decisions made by governments can greatly affect whether the price of Bitcoin will rise or fall. Let’s take the case of South Korea. Authorities in South Korea have ruled that cryptocurrency exchange platforms must have a certificate issued by the state. Anyone wishing to provide such services must be registered. Many of the platforms will not be able to register and get an official certificate to work. And not only that, they are considering introducing another law, ie to introduce a crypto tax on capital gains. These are some of the decisions made by the countries in the world that can significantly cause a drop in the price of Bitcoin.

2. The increase in the price of mining tools

There is currently global inflation caused by the pandemic that has prevailed for several years. Prices of oil, food, electricity and everything else have skyrocketed. The cost of mining is too high. Starting with the computer parts that are needed, up to the electricity that needs to be paid for. If the price of coin remains as it is now, many miners will give up because this will no longer be profitable for them. Their costs are greater than the profits they make. This will cause the number of Bitcoins issued to be limited and its value will continue to decline.

3. Artificial movement of the price of Bitcoin

Source: unsplash.com

This movement of the coin price on the stock exchange is caused by a series of actions by traders. However, the increase and decrease of the price are noticed in the short run. Traders globally buy coins at the same time when its price is low. This action will cause an artificial increase in the price of Bitcoin. The rise in the price of coin will be followed by massive sales, which will cause its price in the cryptocurrency market to fall significantly again. This is one of the possible reasons why we will continuously witness a decline in the value of the original coin.

4. Global skepticism

Maybe we are to blame for the huge drop in the price of crypto. Although it has been present on the stage for years, there are still people who do not want to accept it by any chance. Some skeptics say that this whole crypto story is a big hoax that will not last long. Yes, but we are still witnessing its existence, people are still investing in it, Bitcoin is still present after many many years. But this global rejection and skepticism that Bitcoin is the future, that cryptocurrencies will replace paper money and coins, is leading to a decline in its value. Until people are convinced enough that cryptocurrencies are safe and easy to use and that they will be part of our future, we will not be able to enjoy watching Bitcoin drive the green wave. And for people to change this opinion, it is enough for cryptocurrencies to be recognized by some big corporations or people who can be an example and influence the opinion of the masses.

5. Young people are not prone to taking risks

Source: pexels.com

Some people want to play it safe, they do not want to take any risks, and with that, they have nothing to lose. However, if you are a beginner and plan to invest in Bitcoin, the chances can be 50 – 50. You will either lose everything you have, which is less likely, or you will invest and in return get much more than what you have invested. Those who do not take risks have much more to lose than those who take risks, and that is the chance to succeed in what you do. So if you are a beginner and one of those who want to take risks, our recommendation is to visit bitcoincircuit.cloud. This is a cryptocurrency trading platform tailored for beginners, but also ideal for those who are professionally engaged in this. Do not waste too much time and immediately start creating your account and start working on your trading skills.

Bitcoin may not be the brightest stage at the moment, but that does not mean it will stay that way forever. These are some of the possible reasons that can significantly affect the change in its value downwards. However, many factors motivate and move Bitcoin up. Let’s hope that soon these factors will change the situation and we will be able to see Bitcoin return to the big scene in full glory.

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