Cryptocurrency crash: Bitcoin, Ethereum fall in value. Here are the possible causes

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Bitcoin prices fell to their lowest rates since October 13 on Tuesday night, according to data from CoinDesk – a New York-based news site specializing in cryptocurrencies – which cited a number of factors causing the crash. According to the website, Bitcoin’s value depreciated to $ 55,460.96 last night, a further 20% drop from the all-time high of nearly $ 69,000 it reached earlier in November.

However, according to digital currency analysts cited by Forbes, there does not appear to be a single factor behind the cryptocurrency crash this week, with the phenomenon instead being caused by a multitude of factors ranging from “the increasing selling pressure, profit taking at the end of the year, as well as speculation ”.

Read also | Cryptocurrency in India: is a blanket ban possible? Here’s how things can change

The cryptocurrency market remains in the red

According to data from the WazirX crypto exchange, the digital currency market currently remains in the red – with all the major ones such as Bitcoin, Ethereum, Solana and Binance taking a price cut. While Ethereum fell 0.86% to trade at $ 4,167, Solana also fell 1.24% to trade at $ 4,167. The so-called “memecoins” – Doge and SHIB – have increased their values, however, but not by much; their growths were set by the crypto exchange at 0.30% and 1.64%, respectively.

Possible causes of the cryptocurrency collapse

According to John Iadeluca, the founder of the multi-strategy fund Banz Capital, there has been a movement of Bitcoin from extremely old wallets that has sparked rumors and apprehensions from investors, leading to a potential drop in the market price. . “Observers are trying to figure out what the movement of Bitcoin from old wallets means, and whether it indicates significant Bitcoin sales made from those wallets in the near future,” Iadeluca said, quoted by Forbes.

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There is also reasonable angst among investors regarding Mt Gox, a Japan-based Bitcoin exchange. Once considered the largest Bitcoin intermediary in the world, handling more than 70% of all its transactions worldwide, the exchange closed and suspended its activities in 2014. The liquidation procedure to reimburse its customers has still not been resolved. , and Mt Gox announced that around 850,000 bitcoins owned by customers and the company were “missing” and likely stolen, an amount valued at over $ 450 million at the time.

A bankruptcy protection program (called a “civil rehabilitation plan”), which promised billions of dollars in Bitcoin as compensation, was accepted last month by around 99% of creditors on the now-defunct stock exchange. However, apprehension remains high: if creditors – who will now receive more than 140,000 units of Bitcoin – sell their holdings, this would naturally put downward pressure on the price of bitcoin, causing its value to drop.

India to ban private cryptocurrencies and make way for its own digital tokens

In a related development, the Indian government will introduce a bill to ban private cryptocurrencies and create a framework for an official digital currency to be issued by the Reserve Bank of India (RBI) in the winter session. of Parliament from November 29.

Read also | Bill to ban cryptography from the government’s parliamentary agenda

India, which has generated strong interest among investors to invest in cryptocurrency and also many investors who are already investing, continues to warn citizens against placing their money in cryptocurrencies by citing high financial risks.

Previously, the International Monetary Fund (IMF) also mentioned that cryptoassets are extremely risky and should be watched closely as they have the potential to disrupt various aspects of the global financial system.

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