Bitcoin Nearly Drops 30% in Just 5 Days

 

After a tumultuous year, a crackdown in China has sent the price of cryptocurrencies tumbling. China has banned the use of bitcoin and other cryptocurrencies, which temporarily knocked a third of their value off the price. Tesla has purchased bitcoin for $1.5 billion. But what can all of this mean for the future of these cryptocurrencies? This article will explore the reasons for the recent price crash, the Chinese crackdown on cryptocurrencies, and Tesla's $1.5 billion acquisition of bitcoin.

Solana price plunges 30% in just 5 days

The Solana price dropped 30% in just five days, retracing its losses in the process. The reason for this is the underlying technology behind Solana: the native cryptocurrency, SOL. SOL is used to pay transaction fees, stake tokens, and give holders the right to vote on upgrades. The Solana Foundation has announced that they are releasing 489 million SOL tokens into circulation in the near future. So far, 260 million of these tokens have entered the market.

Despite the price drop, Solana is not yet at the bottom. It has fallen over one third in the last five days and is currently hovering around $40, almost eighty percent below its peak. This means it will likely take another two to three years before it reaches its all-time high. The growth momentum will depend on macroeconomic factors such as the inflation numbers. Inflation figures will impact the growth of crypto markets.

Ether price plunges 30% in just 5 days

Ethereum, the most popular cryptocurrency, has seen its price plunge by more than 30% in less than five days. The fall coincided with the arrival of 68 "Ether whales," who are investors holding 1,000 to ten Ether each and a total value of $350,000 to 3.5 million. The news that these whales had piled into Ether prompted a swift reaction from the crypto community.

The ETH cryptocurrency has been experiencing a massive drop in price in the past 24 hours, as most of the major cryptocurrencies have dropped in value by more than 10%. As a result, the entire crypto market lost close to $200 billion in less than 24 hours, according to CoinMarketCap. Bitcoin, the largest cryptocurrency by market capitalization, fell 10% to $38,440 and erased 75% of its gains in 2021.

China's crackdown on cryptocurrencies

Last August, China announced a blanket ban on all mining and transactions in cryptocurrency. While that ban did curb the demand for bitcoin, new data shows that China's appetite for cryptocurrency has not died down. The country's largest financial institutions have announced a coordinated effort to stamp out illegal crypto activities. The People's Bank of China is planning to ban the sale, use, and storage of all cryptocurrency related transaction services by May 2021.

The Chinese government is worried that initial coin offerings and cryptocurrency will be used for fraudulent activities, such as money laundering and ponzi type investment schemes. As a result, the government is trying to prevent social unrest in the run-up to the 19th Party Congress. The country has also struggled with stock market volatility, as the A-share market lost more than half its value in less than a month in 2015.

Tesla's purchase of $1.5 billion of bitcoin

The company has put some corporate reserves in Bitcoin, a digital currency that may become an alternative store of value in the long term. Bitcoin is still a relatively new currency, but it has attracted enthusiasts for its security and scarcity. But while bitcoin has not been widely used to buy goods, it has been favored by criminals and those who distrust the banking system. Currently, only a few companies have accepted Bitcoin payments for their goods.

But the company's recent purchase of bitcoin is not the only development that is making the cryptocurrency popular. Tesla recently announced its intention to begin accepting bitcoin as payment for its products in the coming years. The move comes amid reports that institutional investors have been pouring money into the cryptocurrency. Moreover, Tesla may be at a disadvantage when compared to other traditional automakers. But the company is still ahead of the curve in terms of adoption and growth.