By Puja Shah. Edited by Arjun Chandrasekar.
A few months ago, you may have heard of quite a rumble of discussions about cryptocurrency, specifically Bitcoin, and how it seemed to be doing quite well. Having nearly tripled in value over a span of 6 months, as it went from around $18,000 to $60,000 at one point, the new digital currency seemed to be doing fantastic in the eyes of the gazing public. However, if you have been following Bitcoin recently, then you may have heard of its bearish fall, nearly falling below $30,000 at the end of June. CNBC describes, “Investors have seen the value of bitcoin slide about 25% over the past month and talk of capitulation creep into online forums.” Let’s talk about why this happened.
Since early May, the cryptocurrency market has been experiencing severe drops in its values. Bitcoin has almost dropped 50% from its once $60,000 value and now dwindles at around $30,000 and according to some many drop even more. While there are many explanations for the recent fall, many reasons point to China’s regulations on energy-intensive mining and demand financial companies to stop doing business with this market. Statements made by companies and individuals have caused some to respond as a result, and higher regulations are being set on the currency from countries around the world. According to CNBC, “U.S. Treasury calls for stricter cryptocurrency compliance with IRS, says they pose tax evasion risk.” Countries such as Bolivia, Ecuador, and Colombia have banned the currency altogether.
That being said, Bitcoin is still much higher than it was at this time last year and it has also experienced dramatic falls and managed to pick back up again. What do you think will happen to the currency in the future?