The phenomenon of cryptocurrency crash is caused by a multitude of factors, ranging from “rising selling pressure, end of year profit-taking, as well as speculation”.
The data sourced from CoinDesk – a New York-based news site specializing in cryptocurrencies, claims that the bitcoin prices fell to their lowest rates since October 13 on Tuesday evening.
According to the website, Bitcoin’s value went down to $55,460.96 last evening, an additional 20% slump from the all-time high of nearly $69,000 that it reached earlier in November.
However, the digital currency analysts stated that there is not just one factor driving the cryptocurrency crash this week, the phenomenon instead being happened due to multiple reasons, be it the government policies or the rumors about banning cryptocurrency in India.
The crypto market remains in red since Tuesday night, shortly after the government announcement. According to data sourced from crypto exchange WazirX, digital currency coins such as Bitcoin, Ethereum, Solana, and Binance taking a price dip.
While Ethereum plummeted by 0.86% to trade at $4,167, Solana also dipped by 1.24% to trade at $4,167.
However, The so-called Doge and SHIB increased their values, though not by a lot. Their growths were pegged by the crypto exchange at 0.30% and 1.64%, respectively.
Possible Causes behind the dip of cryptocurrency prices in India
As stated above, there are various reasons that lowered down the cryptocurrency in India. Some of them are listed here.
- As per the founder of multi-strategy fund Banz Capital, there’s been a movement of Bitcoin from extremely old wallets that has triggered rumors and apprehension from investors, leading to a potential drop in market price. Ladeluca quoted that “Observers are trying to figure out what the movement of Bitcoin from the old wallets means, and whether this indicates large sales of Bitcoin made from these wallets in the near future.”
- A Civil Rehabilitation Plan that has promised billions of dollars in Bitcoin as compensation was accepted last month by about 99% of the creditors of the now-defunct exchange. If the creditors who receive more than 140,000 units of Bitcoin sell their holdings, it would naturally put reverse pressure on the bitcoin, thereby decreasing the value.
- Earlier considered as the largest Bitcoin intermediary in the world, Japan-based exchange Mt Gox got shut down and suspended trading in 2014. The liquidation proceedings to pay back its customers have still not been resolved, and thus it announced that approximately 850,000 bitcoins belonging to customers and the company were “missing” and likely stolen, an amount valued at more than $450 million at the time.
These are some of the reasons for the sharp decline of crypto prices in India. For more such updates, keep visiting the page regularly.