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Can Bitcoin ever crash?

Cryptocurrencies, especially bitcoin, have gained the interest of many investors since 2017. Bitcoin started in 2017 with $963.38 and reached $13850.40 in the same year, with a gain of 1.338%, and bitcoin approached $19.870.62 on December 17, resulting in bitcoin and other coins.


Can Bitcoin ever crash?

There are many reasons why bitcoin and other cryptocurrencies have increased or declined in value, the most important of which is supply and demand policy. There are also many other reasons why bitcoin collapses and returns to $ 1000, and it can be traded below.


Can Bitcoin ever crash?
Can Bitcoin ever crash?

1- Regulations and regulations: Regulators have the greatest impact on the decline in bitcoin prices. Many countries have developed some regulations and discussed plans to limit cryptocurrencies, making regulations a heavy burden on bitcoin and negatively affecting its rate of use and price. These countries include:


  • South Korea: South Korea has added some regulations and is considering activating additional laws. It has announced that crypto - currency trade will be fined if they are not transferred from virtual accounts and traded from anonymous form to real - name accounts.
  • Japan: Japan has begun to regulate the use of bitcoin and other cryptocurrencies. After dropping out of cryptocurrency in 2014, legislation passed last year that bitcoin could be used as a legal currency, although it is a positive step, but additional rules are expected to restrict the use of the currency to its detriment.
  • China: A Reuters article saying "Authorities must ban the central circulation of virtual currencies as well as individuals and companies providing related services" will affect the price of bitcoin.
  • United States: The head of the SEC issued cryptocurrencies, identified the places where virtual currencies are traded, stated that they are open and investors must be careful, that there must be some questions that the investor must ask and know before the investment begins, that the SCE is interested in this technology and that cryptocurrencies must be placed in the regulatory framework.

2- Bitcoin does not make a real profit: Bitcoin has not made a real profit in the traditional sense, with miners receiving revenue and traders receiving a commission, but bitcoin has no actual presence. It is visible on computers, causing it to be poorly trusted, resulting in low demand.


3- Bitcoin volatility: Bitcoin is a highly volatile investment daily compared to other investments, such as oil, gold, and is considered the most variable of other assets. This is good for tradesmen as long as they know what they're doing, but this is difficult for many investors to accept, causing a lower demand for bitcoin among a wide range of investors.


4- Monopoly of a valuable bitcoin investment institution: It's started. (Chicago Board Exchange) and CME Group in setting up a bitcoin market last December. These investments can be made, since they now cover about 44% of the total value of bitcoin investments. This value is much higher than other future contracts. Given the volatility and risks involved in raising trading if the price of bitcoin moves too much, this could force holders to liquidate contracts, increasing the pressure.


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