Fell Bitcoin Today, Thursday, to its lowest level in 10 days, leading to a selloff that extended to other smaller cryptocurrencies, the world's largest cryptocurrency fell 13% to $ 16,317, a sharp correction from its highest level in three years at $ 19,521 recorded on the day Yesterday Wednesday.
Alternative cryptocurrencies also fell, with Ethereum, the second largest cryptocurrency, down about 13% and Ripple, the third largest by market cap, down more than 20%. Several years earlier this week.
The benchmark cryptocurrency is up about 150% year-to-date, hitting an all-time high of $19,666. The reason for its rally was demand for riskier assets, investor interest in assets that are seen as resistant to inflation, and expectations that have filled the markets that currencies Encrypted will win mainstream acceptance.
Reasons for the current decline
Analysts attribute bitcoin's plunge to speculators liquidating highly leveraged positions that have accumulated as bitcoin approaches all-time highs, as well as tweets from the CEO of cryptocurrency exchange Coinbase, expressing concern over rumors of a regulatory crackdown, stating That the United States will clamp down on individual cryptocurrency wallets.
What drove the growth of Bitcoin?
Over the course of this year, Bitcoin has soared, amid increasing sentiment from institutional and retail investors, that the coin has good chances of getting close to an all-time high of $1,987, and the events of recent months have ignited this dramatic improvement in investor interest.
Fidelity Investments launched a bitcoin-backed investment fund, and Square and MicroStrategy have swapped billions of dollars for bitcoin, fueling the leading cryptocurrency with gains.
But the event that turned things around in favor of the crypto community was the addition of a cryptocurrency service by payments giant PayPal, in October PayPal announced that its customers would be able to buy and sell cryptocurrency directly via PayPal apps. Which led to a scramble for Bitcoin demand everywhere, which in turn caused its price to grow rapidly amid all this massive fog.
The current elevation is different from 2017
Bitcoin was created in January 2009 at the height of the financial crisis, as it was intended to be an alternative to traditional paper money, and is organized through an interconnected but independent network of computers that cannot be controlled by any government or central bank. The limited supply of currencies making them immune to inflation, this is one of the main competitive advantages of the currency which is widely considered a safety net against inflation risks in the context of unprecedented monetary stimulus to support the global economy.
The leading cryptocurrency last became very popular in the fourth quarter of 2017 when its price nearly quadrupled and approached $20,000, at which time the market was not ready for such a rapid rise in the innovative crypto industry.
But this time investors believe that Bitcoin’s bullish run is different from the 2017 narrative, because the regulatory environment has become more transparent, and US regional and federal authorities including the Internal Revenue Service and the Securities and Exchange Commission have set guidelines for dealing with virtual currencies, which have allowed companies to Such as CME, Intercontinental Exchange and Fidelity Investments offer cryptocurrency buying and selling services.
While the market remains elated about expectations that Bitcoin will continue its bullish run and may rise to $100,000 in the future, the immediate target for the coin is currently at $20,000.
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