In the land of cryptocurrencies, we’ve gone from a flash glitch to flickering warning signs. On Wall Street, generally speaking, the “crash” occurs when the value of a share (stocks, bonds, commodities) quickly loses its balance. Prices drop sharply and then appear to rebound just as quickly. All of this can happen in minutes on a dramatic and fleeting roller coaster ride. Yahoo! Finance reported that bitcoin experienced a “sudden collapse” over the weekend that saw its value drop by $ 10 billion in liquidation within hours, by roughly 20 percent, from just under $ 65,000 to just over $ 52,100, before recovering to a recent price of around $ 56,000. Yahoo! Over a million positions are reported to have been liquidated. Nothing was definitively identified as the main driver of the crash. According to the site, there have been “unconfirmed speculations” that the US Treasury “may” accuse various financial companies of using cryptocurrencies to support money laundering schemes. Elsewhere, the recession caused a power outage in China, Newsweek reports. The power outage in China’s Xinjiang region, where a significant portion of bitcoin mining occurs, caused a very sudden drop in global hash rates, which in turn led to transaction backups and a temporary rate hike, Jason Dean told the news outlet. Bitcoin Analyst at Quantum Economics, London. The weaker hands interpreted this as a serious problem for the network and downloaded their bitcoins in sufficient quantities to trigger a chain reaction of liquidation through the automatic execution of stop-loss (orders), which reduced the price very quickly, He said. he added. Dean told Newsweek that the event was not a problem and was causing an overreaction. The phrase “weaker hands” can speak to at least one of the key problems facing any market in which speculation (and price volatility) still reigns. Rumors float and the cascading effect can be significant; It doesn’t really matter if the rumor is true. People sell because they believe that others will sell. On the contrary, people buy because they believe that others will buy. If owners have truly dodged the specter/rumors of stricter regulation, then it is important to take into account persistent concerns that regulators and legislators are closely watching cryptocurrencies and to draw attention to the fact that emotions still remain. rule the day. And now there is a mystery before Bitcoin: PayPal opens the door to the use of cryptocurrencies on its network, and you can buy Tesla with it. But external forces, such as problems with manufacturing (or mining) in China, or regulatory clarity (although this can be burdensome), can be overwhelming. Volatility can go a long way towards preventing people from feeling comfortable using bitcoin in conventional trading. Elsewhere, in red flags shining from other parts of the crypto economy, PYMNTS wrote that the value of Dogecoin has soared to $ 40 billion. This is far from its original roots in the world of memes and as a playful alternative to Bitcoin. “The rise of Dogecoin is a classic example of the big fool theory in action,” Freetrade analyst David Kimberley told CNBC. Joke coins and sudden crashes hint that cryptocurrencies still have a little way to go before they actually find their place in financial services and payments.
