The price of cryptocurrencies has crashed even further on Tuesday wiping off long (buy) positions worth over $10 billion.
The price of bitcoin is currently about 50% off its all-time high of around $65,000 last April. Other smaller cryptocurrencies like the ether, dogecoin, and XRP have also collapsed.
“There are multiple reasons for [bitcoin’s] near-term weakness, including fresh strength in the U.S. dollar because of hawkish Federal Reserve, China accelerating ban on crypto-mining firms and blocking banking services for crypto firms, and a lack of institutional interest in crypto,” said Pankaj Balani, the chief executive of the Singapore-based bitcoin exchange Delta.
The market price drop is mostly attributed to China and the Chinese government’s increasing crackdown on crypto-transactions.
China is one of the biggest participants in the cryptocurrency market by both the number of traders and volume of trading.
Chinese traders and investors also control most of the mining and staking activities because of the low-cost electricity and local availability of huge amounts of money. Regulators in several Chinese regions have ordered cryptocurrency mining operations to shut down.
Traders and investors have been selling off due to the worry of continuous decrease in market prices.
The persistent selloff on this prevailing downtrend will further decrease bitcoin’s market price, dragging down other cryptocurrencies in the process.
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