Why Bitcoin depreciates (why Bitcoin depreciates)
Why did Bitcoin depreciate? In the 2008 financial crisis, the value of Bitcoin was never overestimated as it is now. However, with the development of the cryptocurrency market and the continuous strengthening of central bank regulation in this field, the price of Bitcoin has also begun to decline significantly Why did such a huge loss occur? It causes investors to lose a portion of their investment portfolio assets, resulting in depreciation and inflation. All this happened after the crash of China’s stock market. The China Securities Regulatory Commission (hereinafter referred to as the “CSRC”) issued the Notice on Preventing the Financing Risks of Token Issuance (hereinafter referred to as the Notice), reminding everyone to be alert to speculation. According to official announcements, the term “virtual currency” was jointly announced by seven ministries including the National Development and Reform Commission and the People’s Bank of China. Meanwhile, China has explicitly prohibited the use of blockchain technology for illegal fundraising activities. “ICO”, “decentralized exchange” (such as fire coin), etc. are all Medium of exchange for such activities. ” For ordinary people, it is important to note that they must hold corresponding tokens or funds in order to participate in ICO; You cannot buy or sell any other tokens If a project party directly purchases these tokens in order to gain more users. This approach may not be suitable for most retail investors, as most institutions earn profits through over-the-counter acquisitions and cannot achieve profitability or profitability. In addition, some miners may choose to exchange these tokens for more computing power to maintain operations Therefore, due to certain factors, such as the sharp drop in the price of Bitcoin, it is easy for people to sell their chips overseas to buy Bitcoin and other counterfeit coins, and eventually let them sell them, ultimately becoming their own chips. But in reality, it has not changed this situation. On the contrary, they are more likely to become a new way of storing wealth – a brand new consumer goods, and even a savings tool So why is Bitcoin in such a situation? Firstly, when a new project appears, its market value will rapidly increase and gradually expand in scale, making its scope of use more extensive, including individual investors and corporate clients. Secondly, when the developer of another project leaves, the operating speed of the entire ecosystem will also decrease, and there will be some room for growth in the coming years. In addition, more and more mainstream media in the current market pay attention to this problem and have reported it as a hot news. Therefore, the price of Bitcoin is often considered to be unique, so we cannot blindly pursue the so-called foam. In addition, it is worth reminding that Bitcoin itself is a highly speculative art, which differs from traditional collectibles in its high investment attributes, separability, and portability
Why Bitcoin has depreciated
Editor’s note: This article is from Babbitt Information (ID: bitcoin8btc), written by Fang Qinyu, and published by Planet Daily with authorization Why did Bitcoin depreciate? According to BitInfoCharts.com data, Bitcoin prices have fallen by nearly 20% or more in the past 24 hours, from a low of around $19000 to below $10600. Currently, the number is $6700, indicating a significant short selling risk and “high overflow” phenomenon in the Bitcoin market, which has continued until April 3 of this year
During the historical bear market of History of bitcoin, investors often see some negative news. These events include China’s first Bitcoin mining ban, US President Trump signing a government stimulus bill, and a global stock market surge However, due to many factors, the price of Bitcoin continues to decline. For example, from late December 2017 to early May 2018, with the passage of the Federal Reserve’s interest rate resolution, gold also experienced a significant surge; In mid February of this year, as BTC prices began to rebound, this trend changed. On the other hand, since November last year, Bitcoin has not risen as before. Nevertheless, a considerable number of traders believe that Bitcoin may continue to be hyped with the influx of institutional capital. So what is driving Bitcoin out of this market? The first is the market structure of Bitcoin itself, which means its basic characteristics run counter to market demand. At the end of 2017, the price of Bitcoin reached its peak and entered a sideways stage. It was only in early 2019 that it officially kicked off. Until the last three quarters of 2019, prices continued to decline to around $6000. However, in the following months, Bitcoin returned to operating within the $7000- $7100 range again
As an asset class, Bitcoin has attracted more and more attention, such as the halving effect of Bitcoin, benchmarking Ethereum, DeFi applications in recent months, and the rise of other tokens. Although Bitcoin did not attract much attention after its bull market in late 2017, it has been slowly rising and steadily growing in early 2020. As we mentioned in our previous article “Why Bitcoin Goes Downward”, “We found that Bitcoin prices have experienced extreme market volatility in the first two months of 2018.” The reason Bitcoin has been able to maintain this performance is because its supply has decreased by half. In addition, because of its high Scarcity, it can be used to determine the future development direction of Bitcoin. Another reason may be that it is a new Cryptocurrency, and its value storage function will gradually disappear, so people are usually unwilling to buy or hold Bitcoin. If Bitcoin really becomes a configurable part of the investment portfolio, it is likely to never generate any substantial returns, “said Brian Armstrong, CEO of Coinbase.” As you know, it is a completely new form of asset.
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