Latest news about Bitcoin and all cryptocurrencies. Your daily crypto news habit.
At present, the situation in which the crypto market is in, we can call it crypto crash in common language, due to which the value of every coin in this market has decreased. In other words, we can relate Crypto Crash to the going down of the market price.
At this time the crypto market is also going through a similar phase in which many coins present in it have lost more than half their value. If it has had the biggest impact on any cryptocurrency, it is bitcoin. Bitcoin lost 55% to 65% of its value.
It is worth noting that the crypto market has suffered a loss of about $ 2 trillion so far. Which is equal to 20% to 50% of the GDP of many small countries.
What is Crypto Crash
A Crypto crash is a situation in the crypto market when there is a bearish phase in the market and by this time more than half of the coins present in the market lose a large part or more than half of their value.
Due to Crypto Crash, many investors lose a lot of money and this reduces them to millions of crores. If we talk about its other aspect, then those currencies which have just been newly launched or which will be launched during this crash in some time to come.
Effect of Crypto Crash
-
There is volatility in the market.
-
Crypto currency loses its value.
-
Affects the upcoming Crypto projects.
-
Investors lose lakhs of rupees.
-
New investors are afraid to enter the market.
6 Big Causes of Crypto Crash
-
Fear of losing money
Where Crypto Currency is a very risky currency, so you should do a lot of research before investing your capital in it. This is the reason that when investors put their money in such projects in which they showed a lot of profit at once, due to this, when their coin or project failed, their money was lost.
Due to the fear of sinking this money, investors gradually came out with different types of concepts about almost every coin, due to which there was a lot of difference in their investment and when there was less investment in them at the right time, the value of the coin went down and Crypto Crash. Probability increases.
-
Lack of correct investment information
When a new person comes to the crypto market, he does not know how which coin works and how much it would be right to invest in which crypto. Due to which he is not able to make the right investment at the right time and this creates a negative sentiment in the Crypto Market that this market is not right for you to invest.
-
Lack of liquidity in the market
Whenever there is a large amount of a coin in the market, the high demand of that coin can also be easily met, but when its liquidity decreases, its value increases when there is a limited coin but when its liquidity decreases, its value increases. If trading starts decreasing, then the demand for this coin also decreases and the value of this coin keeps on decreasing.
For example, 21 million bitcoins are being mined in the world at the moment, when this mining is completed, the value of bitcoin will increase significantly after limited availability. Due to which people will gradually expect more profit from it and will reduce its trading due to which its value will decrease.
Something similar happened in the present time when people were seen giving first priority to Shiba Inu and Doge coin over Bitcoin. Due to which there was some degree of stability in the value of Shiba and Doge, but there was a huge drop in the value of Bitcoin, and this is also the biggest reason for the Crypto Crash.
-
Cryptocurrency regulation
Crypto Regulation is the biggest reason for Crypto Crash. When China banned Crypto in the year 2021, the miners who did the mining had to go to the court. The reason for this is that they get some amount of coin as reward only through this mining.
Mining any miner requires a certain mining hash power which helps them in mining. Whenever a country imposes a ban on crypto, it affects its value and when it has an effect on the value of crypto, its effect can be clearly seen on its hash power.
The effect of this is in such a way that miners also get a small amount of rewards, due to which the lack of crypto affects its value.
-
Fear of security
Blockchain and network security is also an important factor that affects its value, and causes crypto crashes. For example, if ever it is found that there is a flaw in the security of bitcoin, it will affect the wishes of the miners and this will have a direct effect on its hash rate and value.
-
Correlation with stock market
The biggest feature of cryptocurrency is that it is a non-correlated currency. In the last few years, the trend of people has shifted from the stock market to the crypto market, due to which it has grown very fast in a very short time. But if it is linked to the stock market, it will completely lose its distinct identity. Due to which also Crypto Crash can be seen.
Mainly these are the six reasons due to which we get to see a huge Crypto Crash.
Author Bio
Abhishek Patel is 22 years. Occupation: Blogger. Website : https://www.cryptoforever.in.net/
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.