The worlds most popular crypto-currency bitcoin just experienced a serious drop in its price. At the start of the year, bitcoin was worth over $10,000 but in just a few days ago it dropped drastically and at the time of writing this article, bitcoin’s worth in dolar was $7847.
What could have made bitcoin’s price to drop so low. Lets examine just three reasons.
Concerns over the spread of the coronavirus has caused widespread panic. In just over two months, the coronavirus has infected over 100,000 people and the death toll has risen to nearly 4,000.
With such a rapid spread of the virus, people are scared for their lives, their future and their finances. Its not so surprising then to see crypto investors selling all they own.
Such repeated sales done by crypto investors can reduce the worth of bitcoin leaving it bearish.
Even the stock market has been affect by this epidemic. According to financial analysts, the stock market bubble is bursting and the pin that pricked the bubble is the coronavirus.
Tax Form Changes
Peak tax season has caused alot of confusion to crypto investors especially in the United States. The tax form American citizens must submit to the government now includes a question on if that taxpayer held or traded both crypto-currencies like Bitcoin and Ethereum during the tax year.
In the past crypto investors didn’t bother to report profits or losses but now answering the question falsely could lead to jail time.
With so many investors realizing that they will need to amend past tax returns and get their earnings up to speed for reporting, it would’nt be unusual to see a tax season-related spike in selling thus reducing bitcoin’s value.
Bitcoin skepticism has become higher than ever. This has led to asset’s halving.
While many still believe that bitcoin will take off like a rocket ship due to the supply and demand balance being offset, others envision the end of the crypto-currency.
Industry analysts are publicly asking why exactly Bitcoin needs to exist and aside from speculation what purpose it truly serves.
Even today, I think it’s far more likely that Bitcoin will collapse, than rally to a new all time high. Nobody uses it. Its heavily centralized to China. It consumes enormous amounts of energy, and it has zero properties of a “safe haven” investment. Did I mention nobody uses?
@Magic Poop Cannon said on twitter.
While this is clearly based on opinion even the CEO of Coin-base the world’s most prominent Bitcoin-related company seems skeptical of Bitcoin’s future.
With such skepticism crypto traders might shy away from trading the crypto-currency this period since its not a safe investment. Others might think otherwise.
No doubt investing in bitcoin will be risky as no one can tell if the crypto-currency will increase in value. Many speculators are skeptical of the crypto-currency while others feel bitcoin will increase in value.
Obviously, its just a matter of opinion.0
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