Why is Bitcoin down today? – Advisor Forbes INDIA

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The largest cryptocurrency in the world, Bitcoin (BTC) is trading under immense pressure. A Bitcoin is now worth around $17,000, which was almost worth around $69,000 in November 2021. Since then, Bitcoin has been on a downward trajectory and it now seems almost impossible that it will ever regain the highs it has seen for a long time. in 2021. .

So what should you do if you are currently invested in Bitcoin? If you run a mile or have high hopes that Bitcoin will soon rebound to its all time highs soon. Through this detailed read, we explain why Bitcoin is collapsing today and what Bitcoin’s fall means for crypto investors.

What happens to bitcoin?

2022 has been a tumultuous year for the king of cryptocurrency, Bitcoin (BTC). Bitcoin, which peaked in November 2021 and surpassed $69,000, is struggling even to hold around $18,000. After the fall of FTX, Bitcoin is unable to cope with market pressure and therefore shows no real signs of recovery.

Overall, the cryptocurrency market has shown a downward trend and has been extremely volatile since the collapse of FTX, one of the world’s largest crypto exchanges. Apart from the collapse of FTX, rising interest rates and inflation fears have also played a huge role in keeping crypto prices lower.

After the deadly November crash, Bitcoin is hovering between $16,000 and $18,000. BTC has marked an almost 80% decline in value since hitting its all-time high in November 2021. It also broke through levels of $18,000 on December 15, 2022, but that price only lasted a brief moment, then it fell again. below $18,000. Experts believe Bitcoin is about to bottom soon, however, others believe there is more downtrend underway.

Here is how the current price of BTC has fallen since its peak in the past year:

Reason behind Bitcoin’s fall in 2022

Bitcoin, which started 2022 on a high note, may have seen its peak again by the end of 2022, but some unfortunate events caused the price of BTC to fluctuate too much, causing BTC to drop 50,000 $ to $15,000, over the past. one year.

The recent price fluctuations of Bitcoin and the overall crypto market are due to weak macroeconomic headwinds and recent bankruptcies in the crypto world. Bitcoin went down as a result of:

Russia-Ukraine war. Rising inflationary fears which means more spending on the cost of living. Uncertainty due to rising interest rates in the US and UK China makes cryptocurrency transactions illegal .New tax regime system in India.Crash of Terra-Luna.Finally, the collapse of the world’s largest cryptocurrency exchange FTX.

The Bitcoin price decline in 2022 was triggered by the aforementioned reasons. These unexpected and unfortunate back-to-back events not only caused the markets to sell off and panic sell, but also played a major role in disturbing the mood of investors.

What does Bitcoin’s fall mean for crypto investors?

Bitcoin, which is one of the most preferred cryptocurrencies among the huge lot, has also been touted as an alternative to gold, which means it could prove to be a hedge against inflation. Similarly, Bitcoin is the only cryptocurrency that has been widely accepted as a legitimate form of payment, along with fiat currencies, but such companies are certainly very few.

Those who invest in Bitcoin know very well that digital assets are extremely volatile in nature and are likely to fluctuate even within 24 hours. This means that even Bitcoin’s price is purely based on investor speculation as to whether it will rise or fall in the future. Investors believe very strongly that as fast as Bitcoin prices go down, it could just as quickly go up.

Market experts are fully confident that given its volatile nature, it is possible that one day Bitcoin will regain momentum and show a price rise at some point in the future, which could take weeks, months or even years. Bitcoin proponents view it as a beneficial investment avenue that helps diversify the overall portfolio and could yield massive returns at any time than any other form of investment. However, before investing in Bitcoin, one should know the basics that can help them make a sound financial decision.

Tips to consider before investing in Bitcoin Do not invest all your savings. It is advisable to invest only 5% to 10% of your overall portfolio in cryptocurrencies such as Bitcoin. Invest the part of the money that you can afford to lose. Like other traditional assets, treat cryptocurrency as a long-term investment. Understand the volatility nature of Bitcoin, then take a call to invest. Research the best time to buy or sell Bitcoin thoroughly to maximize returns.

One thing is for sure, Bitcoin is unstable and volatile, with a record of boom and bust cycles that have left many wondering if it is safe to invest or not. It is also not regulated like any other form of conventional investment product such as stocks or mutual funds. Moreover, Bitcoin does not have its own intrinsic value and it is entirely based on mere speculation.

Therefore, never hesitate to consult a financial planner who can guide you on the amount and the cryptocurrency that fit into your investment strategy according to your financial goals.

Step by step guide on how to buy Bitcoin in India?

Once you are sure to invest in Bitcoin, check these steps mentioned below on how to buy Bitcoin in India:

Step 1: Create a free account by logging into any of the selected crypto exchanges through their website or app. Step 2: Register through the app or website and verify your identification. Step 3: Click on the buy tab which is usually associated with cryptocurrency options. For example, the ABC exchange will have an XYZ number of cryptocurrencies, including Bitcoin, which will have a buy link attached with the name of the cryptocurrency. Step 4: Buy Bitcoin by selecting one of the payment methods such as credit/debit cards, net bank transfers or through peer-to-peer (P2P) trading options and adding funds in the form of your fiat currencies such as INR. Step 5: Once you have purchased the Bitcoin against the payment made in fiat currencies, you can store your Bitcoins either in your personal digital wallet or simply keep them in the exchanges account . You can also sell your crypto at any time or trade it for another crypto or stake it to earn passive income. What is India’s position on Bitcoin and other cryptocurrencies?

The Indian government has fervently opposed cryptocurrencies such as Bitcoin and their adoption as a legitimate source of funds from day one. The Reserve Bank of India, (RBI), has clearly articulated a number of perils and risks associated with Bitcoin and the overall ecosystem of cryptocurrency markets, such as concerns over financial instability, non-transparency and issues related to illegitimate funding, among others. In fact, RBI has strictly recommended regulating the crypto industry by passing a law.

In the 2022 budget, India’s finance minister, Mrs. Nirmala Sitharaman, even referred to cryptocurrencies as digital assets and not money. To wean the demand for cryptocurrencies, the government has also subjected it to a strict tax regime, levying heavy taxes on income generated from crypto transactions of up to 30%. In addition, the government also levied 1% withholding tax (TDS) on payments related to these transactions, which came into effect on July 1, 2022.

In a circular dated February 2022, RBI made it clear that cryptocurrencies cannot be defined as a currency, asset, or commodity; they have no underlying cash flows, they have no intrinsic value; that they resemble Ponzi schemes, and may even be worse. That should be reason enough to keep them away from the formal financial system.

After the aftermath caused by the FTX fallout, the world is talking aloud about integrating digital assets such as Bitcoin into a proper legislative framework and regulatory scanner. It won’t be wrong to say that due to India’s tough stance on cryptocurrencies, the Indian government was able to shield investors from a massive global crypto meltdown.

Conclusion

Bitcoin prices are falling today, but you never know what will be stored in the future. So, if you have decided to invest or hold your position in Bitcoin, be prepared for a bumpy ride as well. Do your due diligence and don’t stick to just one cryptocurrency. Distribute your hard-earned money wisely and thus spread the risk. Invest that amount in Bitcoin, which you can afford to lose.

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