Why is cryptocurrency falling right now? Cryptocurrency investors have had a rocky few weeks. Many people are wondering why there has been such a significant decline in the value of Bitcoin and other coins on the market as well as how to get out of this sudden downturn.
There are many reasons for the recent sharp sell-off, but if you use cryptocurrency investing correctly, it can be rewarding and profitable as long as you keep an eye out for signs of recovery.
The correction was overdue
This overdue decrease in the value of cryptocurrencies has many people wondering if it will happen again. Let’s look more closely at what led to the decrease in the value of Bitcoin and other coins on the market in order to find the answer to this question.
Lack of innovation
For some time now, the cryptocurrency market has been in decline. Lack of innovation is to blame for the significant decline in the value of Bitcoin and other coins available today.
There are many causes for this, but one of the most important is the absence of new coins with original concepts or ideas. Since there aren’t any other cryptocurrencies that compete with Bitcoin, as we’ve seen, it will take some time for the market to recover from this downturn.
Mt. Gox liquidation
The 2014 cryptocurrency crash was mostly attributed to the Mt. Gox liquidation. Additionally, it is among the most well-known hacking instances in history.
Mt. Gox filed for bankruptcy protection from creditors and law enforcement in February 2014, claiming that it had misplaced track of 850,000 customer Bitcoins and 100,000 of its own Bitcoins due to what now seems to be hacker theft.
In response to China’s crackdown on cryptocurrency exchanges, the price of Bitcoin has significantly declined. Due to panic and a massive sell-off, Chinese citizens were unable to withdraw their holdings from these exchanges.
Investors in cryptocurrencies are going through a tax sale of sorts, where they are accounting for capital gains tax when they sell their holdings. This is due to the fact that cryptocurrencies aren’t accepted as legitimate money and were only lately initially granted any kind of worth. Investors must pay capital gains taxes on any coins they sell as a result. For instance, if an investor sells $100 worth of bitcoin, they will be required to pay taxes on that amount.
Exchanges delisting Bitcoin
When Binance announced they would delist Bitcoin SV and Bitcoin Gold, two coins that were produced as hard forks of Bitcoin, that was the first significant factor in this major correction.
Following an ongoing dispute over who created Bitcoin, Calvin Ayre and Craig Wright made this revelation. The prices for both coins fell by nearly 30% in just a few hours as a result of the news.