Every crypto investor wants to know why the crypto industry crashed because it engulfs their huge investment in a few days or hours. Recently, crypto market crashed on 19th up to 30% within 24 hours, the biggest downfall crypto world has faced.
Bitcoin, the most expensive and popular cryptocurrency, faced a downfall up to 40% from its record value of $65000 back in April 2021. According to Coinbase, one of the largest crypto exchange in the USA, all joint currencies was down with an average of 20% except currencies backed by US dollar. Experts have named it a carnage that made the crypto market like a stock exchange on Black Monday.
Reasons Behind Crypto Industry Crashes
The crypto world has seen an unusual growth in the value of Bitcoin from $30000 to $65000 in past few months. This shows that crypto currencies face unpredicted ups and downs affect investors a lot but there are some factors that are major cause of crypto downfall.
Tesla Musk Conundrum
In February, Bitcoin value hit a new record after Tesla made an investment of 1.5 billion dollars in it. It also announced that they would accept bitcoin as a payment method for buying Tesla Cars. After this, bitcoin prices immediately hit the $45000 mark.
During this tenure, Tesla also invested in Dogecoin whose value also raised in no time. However, Musk’s decision to stop using Bitcoin as a payment for cars concerning electric expenditures and pollution played a major role in the recent crypto industry crashes.
China is one of the biggest economies, and it always has a huge impact on global economic growth or downfall. In 2017, China imposed restrict on crypto, and the values of cryptocurrencies crashed at an unexpected rate. After that, the Chinese government allows financial institutes and exchanges to carry cryptocurrency exchanges that play a critical role in crypto growth. On the 19th of May, once again china imposed a ban on crypto services. As a result of it, prices of most prominent currencies like Bitcoin, BNB, Ethereum crashed up to 30% within 24 hours.
Rumors always make or break a market. As cryptocurrency values changes in a dramatic way, rumors can be a major factor in ups and downs there. According to crypto enthusiasts, IRS investigation rumors for Binance ask people to withdraw more than $600 billion from the crypto market.
In the past few days, the market experienced a liquidation of leveraged tokens followed by a crash, and it is normal for the crypto market. The larger adaptation and participation will play a critical role to uplift the crypto market. According to experts, all giant currencies will reveal back and will touch all-time unexpected heights.
Investors have become conscious of the recent crypto crash, and many of them have withdrawn their investors. According to crypto experts, investors should hold their investments for a long time to maximize their profitability. The current volatility is overwhelming for newbies in the crypto market, and it would be a wise decision to hold bitcoin and Ethereum. Many experts said that investors should start slow and steady buying with a systematic plan if they want to enjoy maximum benefits.