The price of Bitcoin has gradually dropped. The low point occurred on Wednesday where bitcoin prices fell 25 percent a week. If measured from the lows of December last year to the present, the price of Bitcoin fell 75 percent. Referring to, the New York Times reported the Bitcoin exchange rate against the US dollar on that date was 4,035 US dollars. There are at least five main reasons why Bitcon prices and other digital currencies continue to fall, as KompasTekno summarizes from the New York Times.

1. Unregulated Infrastructure and Exchange Rate Most of the cryptocurrency trade takes place outside the United States, where such exchanges lack supervision from the well-known US regulatory body that is very strict. This provides space for investors to store shares freely, even though the danger is clearly apparent. Bloomberg reports that the US Secretary of Justice conducted a criminal investigation into manipulation using one of the cryptocurencies, Tether.

Tether is called making anxiety among investors. University of Texas researchers published their findings indicating that Tether was used to pump the price of Bitcoin dkk manipulatively. Some sellers have to sell Tether in a loss, in order to get their money back.

Last 1 Year Cryptocurrency traders also doubted OKEx, a Hong Kong-based digital currency exchange agency. OKEx is known to frequently change the rules early without notifying the cryptocurrency traders. One of the investment managers, Amber AI said that many customers suffered heavy losses due to changes in the regulation. Knowing the many losers, OKEx apologized to its customers, for changing the rules that caused trade chaos.

2. Regulatory Actions One that boosts the value of Bitcoin et al is the activity of the Initial Coin Offering, similar to the IPO that many companies do to seek funding. ICO also allows startups to get funds, but without involving regulators. This attracted the attention of the Securities and Exchange Commission, which considered that the ICO would violate several applicable securities rules. They currently provide sanctions for companies that violate securities laws with their offers. The Securities Commission and the Exchange have imposed sanctions on two companies conducting ICO. They were asked to return money to investors, while this case will still be processed in the future.

3. Organized by the Community, not the Government Because it is separated from the government, cryptocurrency is regulated by a community of developers which means that it will be more vulnerable to weakening. Given its history, one of the biggest cryptocurencies, Bitcoin was created in January 2009. For years, members of the Bitcoin community worked together to improve software. Gradually, the cooperation faded. After a long debate, one group released a new version of Bitcoin software. This version has different rules and is sometimes a new, stronger cryptocurrency called Bitcoin Cash.

Opinion was allegedly re-emerged from the group of initiators of Bitcoin Cash which later broke into two camps. Cash Bitcoin broke into two, namely ABC Bitcoin and Bitcoin SV. In the world of software, one parent software package that is split into different pieces is called a fork. However, the new fork cannot replace the original Bitcoin. However, they have the opportunity to create chaos in the crypto trading market.

4. Unreal Solutions The creators of Bitcoin have a vision that Bitcoin can facilitate instant payment transactions across countries, without having to spin about the exchange rates of different countries’ currencies. One of the other big cryptocurencies is Ethereum. Ethereum, until now ethereum kurs wykres still trying to create a global super computer. Thousands of other tokens were also created for a big purpose. But so far, these tokens have only been used for speculative trading. Developers say that Bitcoin, Ethereum, and most cryptocurencies are teetering because of technical problems that make their tokens difficult to use for transactions in the real world. Those involved in the cryptocurrency industry do offer solutions to facilitate future transactions, but they are slow to produce them.

5. Government Interference So far, the government in many countries seems to be the opposition to cryptocurrency. But according to Christine Lagarde, Managing Director and Chairwoman of the International Monetary Fund (IMF) said that digital currencies could improve payment networks. He also said that the government could contribute to regulating cryptocurence more effectively and eliminate the problem of a lack of trust that actually shackles cryptocurence.

You might also enjoy: