Why is the crypto market falling now
Crypto market in free fall - Bitcoin falls below $ 40,000
The boom in digital currencies seems to be over for the time being. Almost all major currencies lost around 30 percent. It has to do with both Elon Musk and China.
The market for cryptocurrencies is currently under great pressure. After the boom of recent weeks and months, prices continue to fall unchecked following the latest corrections. For the first time since February, Bitcoin fell below the $ 40,000 mark.
On Wednesday morning, the rate of the “crypto key currency” Bitcoin on the Bitstamp platform was quoted at around 39,300 dollars, which is more than 30 percent lower than in the previous week. Compared to the previous year, the Bitcoin is still over 300 percent plus. The share of the overall market has remained more or less stable at 39 percent.
This also shows that the rest of the crypto market is also in free fall in the wake of the most famous crypto currency. Most of the largest cryptocurrencies by market capitalization lose over a third of their value on a weekly basis.
After Musk comes China
The main trigger for the correction since the record highs is Tesla boss Elon Musk. He recently announced the withdrawal of Bitcoin payments at Tesla due to the poor energy balance of the cryptocurrency (we reported). The electric car manufacturer caused considerable uncertainty in the market after Tesla had previously not only accepted payments with the cryptocurrency, but also included bitcoins in its balance sheet.
The markets for blockchain currencies are now feeling additional pressure from statements by the Chinese central bank. This again emphasized that digital currencies must not be used as a means of payment. "The Chinese position on cryptocurrencies was clear from the start," writes Ipek Ozkardeskaya, senior analyst at the Swiss online bank Swissquote, in a comment on the market situation.
Little risk appetite
The renewed warning from the Chinese authorities is therefore certainly nothing new. However, the skin of crypto investors has become thin after the recent negative headlines and the market is sensitive to further negative messages. Ozkardeskaya also recalls that after the last boom three years ago and a high of $ 20,000, the price of Bitcoin temporarily dropped to around $ 3,000.
"The Titanic is made of iron and it can sink," is how the analyst describes the volatile crypto market. It is all the more important to keep this in mind because the global risk appetite is currently limited anyway.
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