Cryptocurrency crash: Bitcoin, Ethereum fall in value. Here are possible causes

Bitcoin prices fell to their lowest levels since October 13 on Tuesday evening, according to data sourced by CoinDesk — a New York-based news website that specializes in cryptocurrency — citing a number of factors behind the crash. According to the website, the value of Bitcoin fell to $55460.96 last night, a further 20 percent drop from an all-time high of $69,000 reached earlier in November.

However, according to cryptocurrency analysts cited by Forbes, there appears to be no single factor driving the cryptocurrency crash this week, instead the phenomenon is caused by a multitude of factors ranging from “high selling pressure, profit taking at the end of the year.” Like, ‘And so is guesswork’.

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Cryptocurrency market is still in the red

According to data obtained from crypto exchange WazirX, the cryptocurrency market is currently still in the red – with prices dropping across all major markets such as Bitcoin, Ethereum, Solana and Binance. While Ethereum fell 0.86 percent to trade at $4,167, Solana was also down 1.24 percent to trade at $4,167. But the so-called “memecoins” – Doge and SHIB – increased their values, although not by much; Its growth has been pegged by the cryptocurrency exchange at 0.30 percent and 1.64 percent, respectively.

Possible reasons behind the decline of cryptocurrency

According to John Iadeluca, founder of multi-strategy fund Banz Capital, there was a movement of bitcoin from very old wallets that sparked rumors and apprehension among investors, leading to a possible drop in the market price. “Observers are trying to find out what Bitcoin movement means from legacy wallets, and whether this indicates significant Bitcoin sales made from these wallets in the near future,” Forbes quotes Iadeluca as saying.

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There is also reasonable concern among investors about Mt Gox, a Japan-based Bitcoin exchange. Once referred to as the world’s largest bitcoin broker that handles more than 70 percent of all of its transactions worldwide, the exchange was shut down and trading halted in 2014. The liquidation process to make payments to its customers has yet to be resolved, and Mt Gox announced that the Approximately 850,000 bitcoins owned by customers and the company were “lost” and likely stolen, an amount estimated to be worth more than $450 million at the time.

The bankruptcy protection scheme (called a ‘civil rehabilitation scheme’), which promised billions of dollars in Bitcoin in compensation, was accepted last month by about 99 percent of the creditors of the now-defunct exchange. However, concerns remain high: if creditors – who will now receive more than 140,000 bitcoins – sell their holdings, it will naturally cause downward pressure on the bitcoin price, causing its value to fall.

India Bans Private Cryptocurrencies, Makes Way for Its Own Digital Tokens

In a related development, the Indian government will introduce a bill to ban private cryptocurrencies and create a framework for an official digital currency issued by the Reserve Bank of India (RBI) during the winter parliament session starting on November 29.

Read also | Bill to ban crypto part of Parl government’s agenda

India, which has seen intense interest among investors to invest in cryptocurrencies as well as many investors who are already making investments, continues to warn citizens against placing their money on cryptocurrencies due to high financial risks.

Earlier, the International Monetary Fund (IMF) also stated that crypto assets are very risky and that they need to be closely monitored as they have the potential to disrupt various aspects of the global financial system.