Nowadays, most crypto traders are asking the same question ‘Why is crypto crashing now?’, and it’s not really surprising. The bitcoin rate dropped below the psychological barrier of $30,000 last week. Together with Bitcoin, all alternative cryptocurrencies collapsed: Ethereum fell by 7%, and Dogecoin — by 8.6%. The capitalization of the entire cryptocurrency market fell by $98 billion. So, why is crypto crashing now? Today, we’ll try to find out!
Why Is Crypto Crashing Right Now: Cryptocurrency Regulation
Why is crypto crashing right now? Well, Bitcoin fell below $30,000 as regulators in the US, Europe and Asia began to call for rigid control over cryptocurrencies and less volatile digital currencies known as stablecoins.
Thus, the world’s largest cryptocurrency Bitcoin, fell 5% to its lowest level since June 22 — $29,300. Investors said BTC is likely to get to the $28,600 level again reached last month. Other cryptocurrencies like XRP have also lost around 5% in price since they have faced many regulatory hurdles.
Why is crypto crashing right now? Last week, European regulators outlined plans to make cryptocurrencies more traceable as part of broader anti-money laundering measures in the block.
The European Commission has stated that companies dealing with digital assets such as bitcoins should be subject to anti-money laundering regulations for crypto transfers.
For example, a company representative that processes cryptocurrency for a client would need to provide his/her name, address, date of birth, and account number, as well as the client’s name. Anonymous crypto wallets will also be banned. The proposals may become effective laws in two years.
Why Is the Crypto Market Crashing: China’s Crypto Crackdown
Bitcoin hit $63,575 in April, then plummeted to $35,000-37,000 and has been steadily decreasing since then. Why is the crypto market crashing? Well, many experts state that the drop was primarily influenced by the tightening of the screws in China, one of the largest countries in terms of Bitcoin mining. In May, the Chinese authorities banned payment services and banks from conducting crypto transactions. And in June, four Chinese provinces Yunnan, Qinghai, Xinjiang, and Sichuan banned miners from working.
Why is the crypto market crashing? The BTC collapse in 2017 was also associated with regulatory restrictions in the PRC. Then the People’s Bank of China banned initial coin offerings (ICO) under the threat of license revocation. This decision turned the market around. If in December 2017 the cost of Bitcoin reached $20,000, then by mid-February 2018 its price collapsed to $6,600, and a year later it dropped to $3,100. Therefore, now the situation can repeat itself.
Why Is Crypto Crashing Today: Final Conclusions
Once we’ve found out ‘Why is crypto crashing today?’, let’s consider ways of addressing the issues raised. Bitcoin can transition away from dependence on the Chinese authorities. Thus, miners across the country have started packing containers of equipment for the move. They migrate mainly to Kazakhstan and the USA.
For example, a logistics company from Guangzhou transported three tons of bitcoin mining equipment to Maryland. The BIT Mining company transported 320 mining machines to Kazakhstan and plans to send another 1600. And this also affected the cost of Bitcoin: in June, miners stopped storing mined bitcoins and sold 4000-5000 bitcoins every day.
Why is crypto crashing today? What do you guys think? Feel free to share your ideas in the comments!