Cryptocurrencies traded at a high record in the last few months. Nonetheless, the New Year has brought nothing but setbacks to the currencies.
The digital currency industry is plunging as governments and major economies curb its growing popularity.
The world’s most profitable cryptocurrency, Bitcoin, has seen a leap in November, recording $68,9.
Bitcoin is not alone on this track. Other cryptocurrencies have incurred the same drop.
A cryptocurrency is a digital currency which is decentralized based on a block-chain network.
Unlike the traditional currencies, no central authority controls the value of the cryptocurrency.
Crypto is regularly used to buy normal goods and services. However, it is commonly invested in various assets, such as stocks and metals.
According to Bloomberg, the higher risk assets, such as technology assets, over the world have suffered such a decline due to the Fed’s intention to unwind stimulus programmes from the markets.
Bitcoin, the largest digital asset, lost more than 12% of its value a few days ago, falling to less than $36,000, its lowest level since last July.
Since its peak in November, Bitcoin has suffered a $600 billion markdown of its market value, with more than $1 trillion dollars lost from the total cryptocurrency market.
It’s the largest diminution of digital currencies. Nevertheless, they have endured higher downturns, according to Bespoke Investment Group, a British wealth management firm.
Similarly, Ethereum, the world’s second most valuable cryptocurrency, has witnessed a 30%drop since the New Year, hitting around $2,400 last week, according to CoinDesk, a news site specializing in digital currencies.
Digital currency is known for its fluctuations since prices may fall back as quickly as they rise.
Various governments have been contemplating a short-term ban on digital currencies as they pose a threat to economies.
Cryptocurrency is always inculpated of tax evasion, money laundering and other illegal activities.
Russia’s central bank, Reuters reported, has just proposed a ban on using and mining crypto for its threat on the national financial stability.
Hence, investors are weighing these regulations which impact the whole market.
Also, China has banned both the trading and mining of crypto.
As India is intending to take the same step, Prime Minister Narendra Modi referred to global coordination in order to confront problems posed by cryptocurrencies.
On the contrary, Goldman Sachs, an American multinational investment bank and financial services, is optimistic, expecting Bitcoin prices to reach more than $100,000 within the next five years.
