Tue. Jun 11th, 2024

Here Is Why Crypto Prices Are Crashing.

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Bear run hit Bitcoin BTC, ethereum and other major cryptocurrencies over the week with prices falling sharply as a broad asset price crash depletes markets despite positive crypto prediction from global crypto exchange CEOs.

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According to Forbes, bitcoin price has lost around 10% over the last few days, crashing to levels not seen since January. Ethereum and its biggest rivals BNB BNB, solana, cardano and avalanche have plunged, with Ripple’s XRP XRP and Terra’s luna also falling—wiping over $100 billion from the combined crypto market.

Ahead of the bitcoin and crypto price crash, the chief strategy officer of $5 billion crypto asset manager CoinShares, Meltem Demirors, warned that governments are going to try to ban bitcoin and other cryptocurrencies.

“What we’re seeing around the world, which is really concerning to me, is using the attack on proof-of-work, and in particular, bitcoin’s energy usage, as a way to implement a de facto ban on bitcoin without saying it,” said Demirors, speaking during the Crypto Bahamas conference it was reported by Insider.

Proof-of-work is the name for bitcoin’s decentralized consensus mechanism that lets so-called bitcoin miners secure the network and validate transactions in return for new coins. Some newer cryptocurrencies, such as ethereum rivals solana and cardano, have adopted a less energy-intensive consensus mechanism called proof-of-stake. Ethereum is trying to transition to proof-of-stake to better scale and reduce its carbon footprint.

Bitcoin, by far the largest cryptocurrency by value, has been widely criticized for its eye-watering energy demands, by some estimates thought to use as much electricity per year as some small countries.

In recent years, as the soaring bitcoin price has caused an influx of miners, lawmakers and regulators around the world have begun weighing whether to ban proof-of-work crypto mining. Last year, a crypto crackdown in China resulted in a miner mass exodus from the country, with many relocating to the U.S. and Europe.

“Governments are going to try to ban bitcoin, they’re going to try to attack bitcoin because it’s really difficult to do otherwise,” Demirors said.

This week, the state of New York has come closer to an effective bitcoin mining ban with a bill calling for a two-year moratorium on proof-of-work cryptocurrency mining operations unless the company uses 100% renewable energy and until the state can complete an impact study progressing through the State Assembly.

Last month, leaked European Union documents revealed the extent of anti-bitcoin sentiment among EU officials—and their desire to “protect” the likes of ethereum. Earlier, environmental activist organization Greenpeace launched a lobbying campaign, funded by the billionaire co-founder of XRP developer Ripple, urging the bitcoin community to consider switching to proof-of-stake.

“A lot of the information [lawmakers are] getting is from other protocols lobbying for this,” Demirors added.

Speaking alongside Demirors, Elizabeth Stark, the chief executive of bitcoin payments developer Lighting Labs, echoed her concerns. “I believe there are a lot of actors out there that are intentionally trying to attack bitcoin because there’s no CEO,” said Stark.

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