Why did Bitcoin fall? (Why did Bitcoin fall so badly in 2021?)
Why did Bitcoin fall? According to CCN, why did the price of Bitcoin fall? Why
Why did Bitcoin fall? According to CCN, why did the price of Bitcoin fall? Why did Bitcoin crash? Let’s analyze it below. What is a price drop for Bitcoin? Bitcoin is a cryptocurrency that is obtained by attracting people’s attention through speculation and greed, and it is considered one of the riskier investment assets than gold. Since many investors see Bitcoin as an important part of their investment portfolio, they seek methods to hedge against inflation (such as high returns, low costs) to profitably exit the market and make profits from it.
During the period from December 17th, 2017 to early 2018, as the global economy fell into crisis and the global financial system collapsed, governments around the world took action to deal with the impact of the COVID-19 pandemic. However, only a few countries’ populations accepted the “pandemic” since they couldn’t avoid losing their wealth due to its disastrous effects. Secondly, Americans began using foreign currencies to pay wages and stock trading fees, which increased the problems faced by the US banking system.
However, the “digital dollar” has been receiving attention since 2013 but experienced significant fluctuations before the end of 2016. Although currently over 50% of Bitcoin in the market is held by illiquid funds, and this trend continues, it is based on the high-selling price of Bitcoin. According to data from CoinMarketCap, the value of Bitcoin had reached $20,000 by the end of May 2019.
Why did Bitcoin fall so badly in 2021
Why did Bitcoin fall so badly in 2021?
In the past 12 months, global stock markets, gold, and commodities have all fallen by more than 20%. Among them, the most representative are the strengthening of the US dollar and the reduction of bond purchases by the Federal Reserve, which have led to a continuous decline in the price of Bitcoin. And with the panic selling in the market due to the COVID-19 pandemic, investors have fled from risk assets to avoid losses, which seems to be one of the biggest blows in the second half of 2020. On October 24, 2020, US President Trump announced a $1.9 trillion economic relief plan (including economic stimulus), followed by a 25 basis point interest rate hike, leading to widespread speculation in the market, but ultimately failed to be implemented successfully, with US stocks soaring nearly 50% as a result.
From this perspective, it is not surprising that the current price of Bitcoin is still not enough for some people, so many people think this is a “bull market”. In fact, recently, people have been concerned about whether the US government will ban the purchase or use of Bitcoin as a currency to cope with the uncertainty and adverse impact brought by inflation, which has led to a significant drop in the price of Bitcoin and even large-scale liquidation. However, such situations are not common: at the end of September last year, the Federal Reserve had already announced the complete cessation of loose policies and will implement quantitative easing measures to maintain economic growth; in February this year, due to institutional funds entering the market, Bitcoin futures contract premium soared to a historical high, hitting a new low since mid-May 2019. Nevertheless, there are still many problems in the market recently, such as the warning from US Treasury Secretary Janet Yellen not to regard digital assets as illegal financing tools; regulatory authorities in China have asked the banking industry to strengthen activities related to virtual currencies such as ICO scams; the issuance of central bank digital currencies may pose challenges to the financial system; in addition, some countries are studying and formulating regulations on CBDC. Furthermore, according to reports, Professor Liu Changyong of Renmin University of China has stated that the development of blockchain technology in China is progressing rapidly and there is a need to improve the legal framework. He proposed that “we need to speed up the research and development of core blockchain technology and its application landing”, and pointed out: “Currently, the work mainly revolves around three directions: 1) Enhancing independent innovation capabilities. 2) Exploring secure and controllable underlying infrastructure. 3) Actively participating in the governance of consortium chains. 4) Establishing industry standards to promote ecological construction. 5) Establishing a data-driven enterprise management system. 6) Establishing an international trade credit mechanism. 7) Creating a unified data sharing platform. 8) Establishing cross-border e-commerce services based on big data analysis. 1) Establishing an information interconnection and protection network. 2) Building a supply chain finance ecosystem based on blockchain. 8) 5G+IoT. 9) Integration of “Internet+” and convergence of multiple industries. 11) Promoting data exchange. 12) Encouraging open sharing of data. 16) Establishing collaborative governance for industrial Internet. 15) Realizing the sharing of data resources. 26) Establishing reliable certification. 17) Utilizing big data mining. 19) Predicting future social changes through artificial intelligence in the 1960s. 20) Utilizing big data mining. 18) Tracing world production relations using blockchain. 23) Blockchain empowers urban digital transformation. 27) Promoting smart government affairs. 30…) Accelerating the penetration rate of blockchain in various fields to reach 10 billion transactions per second.
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