For the first time since July 2021, Bitcoin fell below $30,000 briefly on Thursday. Compared with last fall, Bitcoin is worth about half as much as it was. Ether and BNB, as well as other cryptocurrencies, have experienced similar drops.
Ethereum (ETH) -18.93% (£1,585.24)
Tether (USDT) +0.00% (£0.81)
BNB (BNB) -9.94% (£222.66)
XRP (XRP) -22.43% (£0.31)
Binance USD (BUSD) +2.28% (£0.83)
Cardano (ADA) -25.14% (£0.38)
Solana (SOL) -27.71% (£35.84)
Dogecoin (DOGE) -23.14% (£0.0631)
Polkadot (DOT) -23.13% (£6.68)
Wrapped Bitcoin (WBTC) -9.67% (£23,011.76)
Avalanche (AVAX) -24.52% (£22.97)
SHIBA INU (SHIB) -25.00% (£0.00000870)
Terra (LUNA) -96.90% (£0.0430)
Recent incidents that resulted in the decline of crypto
The Russian invasion of Ukraine has caused economic pressures around the world.
As a result of the People's Bank of China's announcement that all bitcoin transactions are illegal, digital coins have effectively been banned.
Bitcoin mining - a complex process of issuing new digital tokens - negatively impacted the environment, causing Tesla to pull this option.
What else contributed to the cryptocurrency market crash?
It has become more difficult to make money on the crypto market.
In the early days of cryptocurrency adoption, cryptocurrency buyers either got in early and got out, mined cryptocurrency and held it for long periods of time, or traded it regularly. Neither of these strategies is likely to make you rich today, given the investment climate. Increasing difficulty and competition make mining bitcoin more costly, which means that the electricity bill isn't always worth the hash rate needed.
As the Securities and Exchange Commission (SEC) takes action against fraudulent ICOs and drafts regulations, it has shifted its focus. Many critics have claimed that ICOs are simply a way to raise money without providing any tangible returns. The media pays little attention to legitimate ICOs, though there are plenty of them. Even in an unpredictable bear market like the one we're in now, day trading becomes much more difficult.
However, blockchain technology and innovative cannabis-based applications aren't the only area of opportunity coming in the future for cryptocurrency and blockchain technology. Investors will make money if cryptocurrency is updated with another round of innovations.
Cryptocurrencies are volatile by nature.
There is no guarantee of success in the crypto world, and even the biggest crypto enthusiasts will admit as much. Many speculators are drawn to its volatility for the advantage of making money at an accelerated rate.
As the boom promises, there is also the bust. Several major bear-and-bull cycles have been witnessed since Bitcoin was founded in 2009, with investors flooding the market and then losing interest. The use of borrowed crypto on exchanges is common during high times, particularly during the bull run. A lack of cash flow can accelerate the free-fall even more if prices begin to drop, whether because big investors sell their shares or for other reasons.
It isn't possible to diversify risk yet.
Diversifying assets is usually the best course of action when investors are faced with possible manipulations. As a result, you might invest in bitcoin (BTC), ether (ETH), and higher-risk ICOs or altcoins.
However, diversification does not work as investors hope it does in the crypto market. Bitcoin today has a market cap of more than 50 percent. Most cryptocurrency trading takes place between BTC and altcoins since government-backed fiat currencies, such as the USD, cannot be converted directly into most cryptocurrencies. Investors tend to convert their cryptocurrencies into fiat when Bitcoin's price falls, causing the market to crash. In short, crypto does not yet support risk diversification.
Security continues to be a concern for potential investors.
Several cyber-attacks, exit scams, and Ponzi schemes have plagued the crypto market. The term ICOs conjures up images of fraud for some, which is entirely untrue. Nevertheless, the security of cryptocurrency exchanges remains a major concern. In 2018, $1.1 billion worth of cryptocurrencies was hacked. Cyberattacks on cryptocurrency sites have increased 369 percent since last year.
It is much easier to steal money from exchanges rather than banks because exchanging money is easier.
What is the current price of Bitcoin and Ethereum?
According to Coinbase, the price of Bitcoin was £23,143.65 on 12 May after the most recent price drop. The price of Ethereum is now $1,585.24.