Far from the euphoric era of 2021, the queen of cryptocurrency is now facing walls that prevents it from climbing higher peaks. Worse, its price will drop. Where does the problem of bitcoins and other cryptocurrencies really come from?
The absence of a clear direction for several months leaves the community of cryptocurrency. And for good reason, Bitcoin systematically gives driving for other cryptocurrencies. If the first virtual currency rises, then the rest of the market follows, it is so simple. Today, however, it does not seem to be bitcoin determined to go back to new heights. On Sunday night, August 4 to Monday, August 5, 2024, according to our Cryptoast colleagues even lost 17 % of its value in a few hours.
A promising beginning of the year for bitcoins
Everything seemed well began at the beginning of the year. In 2024, the value of bitcoins was on the rise, after the lowest year marked significant events for the ecosystem, such as the Crypto FTX collapse. In March, the cryptocurrency even reached EUR 64,000, setting a new price record closely by exceeding the old ATH (All Time High : The highest price ever reached by cryptocurrency) in the amount of EUR 56,000 in November 2021. This increase was particularly induced by the arrival of the ETF to bitcoins, a financial tool that allows you to expose bitcoin without owning it. In short, the introduction of bitcoins into traditional financing.
The Haussier movement, however, mainly motivated half, which is the process included in a bitcoin code that reduces the prices of two for minor cryptocurrencies.
While this type of event historically originated and Bull-run -The period of the overall increase in the cryptocurrency market, it is still nothing.
Bitcoin even falls, with violent movements such as this Monday 5th August, where it fell below 50,000 euros.
CRACK DU BITCIN: What happened this Monday 5th August?
During the night of this Sunday, 4 to Monday, August 5, 2024, the hope of Krypto investors intervened. Indeed, Bitcoin went from 54,000 euros to approximately 45,000 euros before around EUR 50,000 6th. August. Volatility on this market is part of the game, but since this decline by 17 % in a few hours, many people talk about bitcoin collapse. But what?
Although there is never a 100 % proven reason to explain such a financial movement, they allow certain causes to determine a more or less accurate diagnosis of a bitcoin situation.
It seems that several experts agree that the global financial context would be one of the reasons for this autumn. Since the beginning of the week, world scholarships have been playing in Red in Europe and Wall Street. But it was the Asian market that opened the first to fall into the Tokyo Stock Exchange. This would explain the timing of the fall of Bitcoin, which occurred in the middle of the night with a delay of the current. Regarding the tightening of the Japanese monetary policy, with an increase in the management rate by 0.25 % of the central bank.
These measures have been emphasized worldwide since the COVID crisis, in order to include inflation. All of this is obviously not the benefit of growth, because the central bank is feverish in the idea of lending money.
How can bitcoins bounce?
Bitcoins are still subject to the influence of macroeconomic context, which seems to be more of a reluctance to invest its money on financial markets. Savings are fine and the crypto remains extremely correlated with traditional events. Simply, the rare the liquidity, the fewer bitcoins and other virtual assets are closed up.
This point seems to be this point, which determines the value of bitcoins and even the value of other assets. For example, the last increase in cryptocurrency in 2020 after the COVVid collapse was started with a historical money impression. Several actions related to technology had from this favorable financial context, such as Netflix or Tesla – before collapse as bitcoins in November 2021.
A substantial problem for bitcoins
Although this context plays a lot against bitcoin, it is not the only one to prevent the value. In recent years, the crypto ecosystem has been marked by difficult events such as the bankruptcy of the Crypto FTX platform or the collapse of Crypto Terra Luna.
All of this inevitably has the consequences of investors’ trust who have seen their money absorbed in distinctive violations. And individuals are not the only ones. The dominance of some entities on the market does not help: it seems that the shares of the cake are distributed in a small privileged group that plays with the legend to be decentralized, cryptocurrencies. This is the case of platforms or exchanges that are the first proxy cryptocurrencies today. It is sufficient that one of them encounters the problem of running the market. This is not new, the MTGOX platform has already shown shortcomings of this system long before the fall of FTX.
In addition to this centralization, there is also an availability problem. The virtual currency so -classified today is still cheap for everyday use, despite simplification of interfaces and payment processes, for example through Bitcoin Lightning Network. In Salvador, Bitcoin was introduced as a legal currency, but only 12 % Salvadorates would use bitcoins in 2023, indicating this lack of intuitiveness.