The world’s first-ever cryptocurrency is currently down by 17.82% in today’s market dip, currently trading at $36,000. Bitcoin (BTC) fell by $8,000 within hours today, as investors continue to panic-sell in the cryptocurrency market caused by a domino effect of different news.
Astronomical declines are happening in the cryptocurrency market today with the altcoins not left out as Ethereum is also down 45.54% from its all-time high that was created just about 7 days ago.
Why the decline?
The decline follows a series of events beginning with the Biden administration proposing a new tax increment of up to 40%. On the heels of this proposal, came an alarm from the CEO of Tesla, Elon Musk, about the energy efficiency of the leading cryptocurrency. This concern caused Tesla to stop accepting Bitcoin as a means of exchange and this got investors worried. Next, came concerns about the inflation rate as investors feared the possibility of developed economies such as the United States and China increasing their inflation rate. The icing on the cake was the Chinese regulatory bodies banning Chinese financial institutions from dealing in any digital asset in a joint statement made yesterday.
Today, the cryptocurrency market capitalization is currently down 20.87% over the last 24 hours to put the market capitalization at $1.59 trillion. The volume of transaction in the cryptocurrency world has spiked up by 56% as investors continue to panic-sell their positions. Tether coin, a stable cryptocurrency coin has made its way to #3 with a market capitalization of $58 billion.
Of the top 20 coins, only Polygon Matic appears to be immune to the market dip. In contrast, it has gained 5.17% in the last 24 hours. It is currently ranked 13th with a market capitalization of $13 billion.
Is this outcome worse than March 2020?
In March 2020, Bitcoin crashed over 40% as a result of COVID-19 concerns. Major markets including stock exchanges crashed similarly. The altcoin market also saw a record decline with Ethereum declining significantly by 39%.
The market capitalization crashed by 52.25% from over $260 billion to $126 billion, suggesting that what is happening now does not compare to the market crash of March 2020.
What to expect
The founder of Cardano, Charles Hoskinson, suggested on Twitter today that the current market dip is regular in the cryptocurrency space stating: “One of those days. For all the new kids in crypto, welcome, these days are surprisingly common.”
One of those days. For all the new kids in crypto, welcome, these days are surprisingly common pic.twitter.com/5bcuptxOoy
— Charles Hoskinson (@IOHK_Charles) May 19, 2021
Elon Musk, also took to Twitter stating: “Tesla has Diamond hands” and “Credit to Our Master of Coin”, suggesting that Tesla will not be selling their holdings in Bitcoin.