Cryptocurrency market has been under sell pressure for the past two months. The month of May and June 2021 witnessed unprecedented crash in price. Bitcoin lost over 50% in price while most altcoins lost near 80% of their market prices.
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Speculations has been rife about the cause of the crash. While pundits believe the crash is necessitated by the usual market reset. Others believe that Elon Musk tweet fingers has done more harm than good.
Elon Musk ability to influence market movement has thrown up issues about regulation and sanctioning of speculative actions intended to influence market to ones advantage. The traditional stock market has structured regulation and penalties for Elon Musk type of behavior.
The recent crackdown on Cryptocurrency and crypto minners by Chinese government invariably contributed to the June bear run. Investors fear trippled at the effect of loosing the Chinese market on the crypto ecosystem.
According to report , over 90% of China crypto minners where shut down in third week of June. It is estimated that 70% global cryptocurrency mining happened in China.
This became a blessing in disguise as minners relocated to a Cryptocurrency friendly country. The total harsh rate or network processing fees for Bitcoin went down drastically.
According to blockchain.com, In the last month or so, bitcoin’s hashrate has gone down from a record 180.7 million terahashes per second — a measure of the speed of crypto mining hardware — in mid-May to around 116.2 million as of Wednesday, July 7,2021.
Past week has witnessed relative green zones in cryptocurrency market. Is this the signal that the days of volatility is over ?
The more compelling goods news for cryptocurrency market is the endorsement by President Nayib Bukele. The Bitcoin law proposed by the president was passed by the country’s legislative assembly making Bitcoin a legal tender within the country. This was followed by $30 bonus worth of Bitcoin to any of the Country’s adult using the country Bitcoin app.
President Nayib Bukele also announced that he is building a renewable energy generating hydro thermal power to boost clean mining of Bitcoin.
Debates about the consumption of energy by Bitcoin mining has made investors like Elon Musk withdrew their support for Bitcoin. Carbon emission from non-renewable energy believed to be used in Bitcoin has been a contentious issue.
Bitcoin Miami conference also boosted the confidence of investors and heralded the return of skeptical investors.
So far major obstacles like crypto mining locations and regulations has been sorted. Confidence is gradually returning and market is picking up. Start trading, start investing.
Not a Financial Advice.