Bitcoin hit its lowest since September 29 on Friday dropping below the mark of $41,000 according to Coin Metrics. And it is not only the crypto king that is taking a tip. Nearly all cryptocurrencies are seeing their prices dwindle.
Central bank’s policies to blame
According to the experts, it is mainly because the federal reserve’s hint that U.S central bank is planning to roll back its pandemic stimulus. Also, the increasing interest rate in the banking system is already seeing investors going back to put their money with the banks.
Bitcoin not unrelated to the stocks
Both stocks and cryptocurrencies have taken a hit due to these developments. As bitcoin, and other altcoins, evolve into more mainstream investment opportunities, the patterns of correlation between bitcoin and the stock market have started to emerge.
Kazakhstan’s Internet shutdown
Kazakhstan accounts for 18% of the processing power of the Bitcoin network. With violent protests happening all over the country, the govt. of the day decided to implement an Internet shutdown to tackle the situation. Result? According to estimates, it slashed about 15% of the processing power from the network. And even though the processing power doesn’t affect the price directly, it reflects the security and stability of the network.
Bitcoin is not the only one
But it’s not only the Bitcoin that’s taking the plunge. When the biggest cryptocurrency shows signs of slowing down or picking up, it is bound to affect the mood of the market. Other cryptocurrencies are in for a dip as well. Ethereum fell by 6.8%, while Solana fell by 7.7% on Friday itself. SHIBA INU, which gave massive returns in 2021, also failed to make a recovery and took a further plunge.
All this hints at a market crash and if investors get any more pessimistic than this, the current situation can turn into a self-fulfilling prophecy. Trading experts, however, believe that it is all part of the game. They suggest crypto investors hold on to their assets tightly as the market will revive eventually. The crypto market has seen wild swings in the past. Considering that record, it is not baseless to expect a recovery soon.
Check this article to know how Financial Investors are not shying away from the crypto market.