Bitcoin’s price has dropped to a four-month low as traders worry about a £100 billion dumping in a week and experts warn the fall will continue.
This morning, the price of one Bitcoin fell to £31,000 as the coin and other cryptocurrencies began to tumble after Tesla turned around and the Chinese cryptocurrency closed.
Bitcoin is currently trading below its 200-day moving average (DMA) for the first time since September, a signal of market uncertainty with traders making billions, Yahoo Finance reports.
Bitcoin and other cryptocurrencies began to plunge following reports of various contributing factors.
These include a recent crash caused by Tesla’s move to accept Bitcoin as payment for its products.
China also controls initial coin offerings, block exchanges, and warns against speculative trading.
The country has also ordered the complete shutdown of Bitcoin mining in the Sichuan province and further ordered banks to stop supporting cryptocurrency transactions, in the latest wave of restrictions on cryptocurrencies. death.
The People’s Bank of China has effectively banned the digital currency after announcing all crypto transactions as illegal.
This decision has had an impact on the global cryptocurrency market.
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Musk’s decision represents a major turning point for Tesla, who only started accepting Bitcoin as payment for its services in February 2021.
It comes after the electric car company bought £1.06 billion in Bitcoin shares, which sent the market prices of both the cryptocurrency and Tesla skyrocketing.
However, the impact on the Bitcoin mining environment – a complicated process for creating new digital tokens – has led Tesla to withdraw this option for customers.
“We are concerned about the rapidly increasing use of fossil fuels to mine and trade Bitcoin, especially coal, which has the worst emissions of any,” said the billionaire businessman. What kind of fuel?
Musk reaffirmed his belief that cryptocurrency has a “promising future” but that it “cannot come at a hefty price tag for the environment,” in his Twitter post.
Understand the risk
Before putting any money in crypto, it is important to know the facts.
Cryptocurrencies are only regulated in the UK for anti-money laundering and anti-terrorist financing.
That means your money won’t be covered by the Financial Services Compensation Scheme (FSCS) which protects your savings of up to £85,000 if a company goes bust.
You also won’t be able to go to the Financial Ombudsman Service if something goes wrong.
As a nascent market, it is also extremely volatile meaning crypto traders could lose millions of dollars in an instant following the most recent plunge.
Also, if you lose the key to access your account, you cannot get your funds back and they are lost forever.
5 Risks When Investing in Cryptocurrencies
The Financial Conduct Authority (FCA) has warned people about the risks of investing in cryptocurrencies.
- Consumer protection: Some crypto-based high-return promotional investments may not be subject to regulation beyond anti-money laundering requirements.
- Price volatility: Significant price volatility in cryptocurrencies, combined with the inherent difficulties in valuing cryptocurrencies reliably, puts consumers at high risk of loss.
- Product complexity: The complexity of some crypto-related products and services can make it difficult for consumers to understand the risk. There is no guarantee that cryptocurrency can be converted back to cash. Converting a cryptocurrency back into cash depends on the demand and supply available in the market.
- Fees and charges: Consumers should consider the impact of fees and charges on their investment, which may be more than the impact of fees and charges on managed investment products.
- Marketing materials: Companies can overstate product returns or minimize the risk involved.
“There is no sign of a decisive reversal in sight,” Mikkel Morch, managing director at digital asset hedge fund Ark36 told Yahoo Finance.
Morch added that the similarities between the current price movement and those witnessed between May and August suggest reason for “medium-term cautious optimism.”
In any event, only a clear break above $50k will signal a major reversal in trend and investors should keep in mind the inherently volatile nature of the technical asset markets. number,” added the fund manager.
Yuya Hasegawa, an analyst at Tokyo-based crypto exchange Bitbank agrees that downward pressure on the Bitcoin price will continue until the market fully aligns with tighter monetary policy. expect in the future.
Hasegawa noted that a further drop to $40,000 is likely in the near term.
“A strong jobs report on Friday could justify the Fed’s hawkish stance and could trigger another sell-off. US inflation data (CPI & PPI) next week could help. price recovery.”
So-called “memecoins” also fell, with the price of the Shiba Inu (SHIB-USD) down more than 8%.
https://www.thesun.ie/money/8170479/bitcoin-price-plunges-to-lowest-in-four-months/ Bitcoin price drops to 4-month low as traders worry about dumping £100BN in a week and expert warns trouble will continue