Will bitcoin crash to $5k? Right now, this is the central story in the cryptocurrency community. The most widely used cryptocurrency, Bitcoin, dropped under $20,000 for the first time since November 2020. Its value has decreased by more than 70% during the last seven months. What’s driving the digital currency, which appears to be on a declining trend?
What is happening on bitcoin right now?.
Bitcoin is highly erratic, rapidly increasing and plunging every day. However, it’s not the only cryptocurrency to have seen recent instability. Global stock markets have declined as a result of
- the war in Ukraine
- Inflationary fears
- Insolvency Rumors of FTX
- Binance backing out of FTX deal
A higher interest rate will increase the cost of corporate borrowing.
This has spread to the cryptocurrency industry. In June 2022, transfers and withdrawals were frozen by Celsius Network, a prominent US cryptocurrency loan company, citing “extreme” weather as the cause.
Following this scenario, for the first time since January of last year, cryptocurrency prices dropped below $1 trillion. As a result of the news, Bitcoin decreased to $23,476. Ether, the second most widely used cryptocurrency behind bitcoin, dropped as much as 16 percent to $1,177, its lowest price since January 2021. The increasing crackdown on cryptocurrencies in China is another issue.
Additionally, there have been suggestions that the Russian crypto activities would stop. Significant and rapid selloffs of major cryptocurrencies have also occurred. Consumer trust has been harmed due to the consequent panic and subsequent selloffs.
Will bitcoin crash to $5k, and what should we do about it:
Volatility is inherent in cryptocurrencies, but it is currently working against investors, rather than for them, as it has for the better part of the last two years. However long-term investors typically keep their investments for several years or decades to increase their returns. So, investing in cryptocurrencies over the long term can be a terrific choice if you think the technology based on blockchain will take off in the future.
Final words
Finally, are you going to worry if Will bitcoin crash to $5k? Well it probably wont unless a significant events (like new laws, restrictions, scams, exchange closures, etc.) rocks the cryptocurrency industry. My worst fear came true in the form of FTX insolvency rumors, but I’m yet hoping btc won’t crash to $5k.
At Solutiontales we make it easy to understand the throes of cryptocurrencies, but our words should not be taken as a financial advice. Remember, a wise investor can make money in a bull or bear market when given the right data.