Bitcoin price crashes below $30k amid crypto market collapse
The price of bitcoin has crashed below $30,000, adding to the heavy losses seen across the crypto market in recent months.
The cryptocurrency dropped as low as $29,548 on Tuesday morning, according to CoinMarketCap’s price index, down from an all-time high above $64,000 in mid April.
Other leading cryptocurrencies also suffered big price falls, including Ethereum (ether), Cardano (ada), Ripple (XRP) and dogecoin.
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In total, more than $200 billion was wiped from the combined crypto market.
The exact reason for the collapse is unclear but it coincides with a similar downturn in the global stock market amid concerns that the resurgence of Covid-19 cases could stall the economic recovery.
The price crash also follows comments from some investors warning that bitcoin could be in the middle of a bear market and that the broader space is entering a period known as a “crypto winter”.
Others remain hopeful that the latest dip is merely a price correction and that new record highs will follow later in 2021.
“With yet another poor performing week, speculation on the short-term price direction of major cryptoassets is rife, with mixed opinions on price depending on what metric or indicators analysts are looking at,” said Simon Peters, a crypto market analyst at the online trading platform eToro.
“Long-term confidence remains high, however, with a recent survey of FinTech experts revealing more than half believe bitcoin is capable of becoming the global reserve currency by 2050.”
The survey from comparison site Finder,com also found that nearly a third of participants believe the so-called “hyperbitcoinisation” could take place before 2035.
and what experts predict for the future after price crash
Bitcoin has fallen below $30,000 (£22,000) for the first time in a month, and other cryptocurrencies are also crashing.
Ethereum lost around $100 of its value this morning, falling close to $1,700 (£1,200), and Dogecoin has suffered a similar fall, dropping below $0.17 (£0.12).
Bitcoin’s price is now less than half of its April peak, when it reached record highs of over $63,000 (£46,000).
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However, it remains well above 2020 figures, and many investors are still bullish about its future.
Why is cryptocurrency crashing?
The crash reflects a downturn in the stock market, which has come as Covid-19 cases rise again, fuelling concerns the economy could be affected.
Marios Hadjikyriacos, senior investment analyst at XM, told The Guardian: “Worries that the rampaging Delta variant will hamstring the global recovery took a bite out of riskier assets on Monday.
“Markets seem to be coming to the realisation that the vaccines won’t be enough to completely obliterate the virus, as the mutations keep getting more resilient.
“Many governments are also struggling with vaccine hesitancy, which is blocking the path towards herd immunity. Meanwhile, developing nations simply don’t have enough vaccines to escape the lockdown spiral. Add everything up and it looks like the pandemic might stick around for a long time.”
What could happen next?
Many experts are still confident in the crypto market, and see this is nothing more than a temporary blip.
Simon Peters, a cryptocurrency market analyst at online trading platform eToro, said: “With yet another poor performing week, speculation on the short-term price direction of major cryptoassets is rife, with mixed opinions on price depending on what metric or indicators analysts are looking at.
“Long-term confidence remains high, however, with a recent survey of FinTech experts revealing more than half believe Bitcoin is capable of becoming the global reserve currency by 2050.”
However, cryptocurrency is notoriously volatile. Prices could easily crash further. This is why you should always be careful when investing, and only put in what you can afford to lose.
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