Bitcoin's Value Plunges Less Than $20,000 for First Time Since November 2020

Joaquin Victor Tacla, Tech Times 18 June 2022, 05:06 am

On Saturday, June 18, the price of Bitcoin plummeted below $20,000 for the first time since November 2020 after the crypto market crashed down due to inflation, rising interest rates, and other economic challenges fueled by the Ukraine-Russia war, according to the New York Times report,

[BREAKING] Bitcoin's Value Dips Due to 'Extreme Market Conditions'

(Photo : Photo Illustration by Dan Kitwood/Getty Images)
LONDON, ENGLAND - AUGUST 15: In this photo illustration a visual representation of the digital currency Bitcoin sinks into water on August 15, 2018 in London, England.

Bitcoin's Decline

Bitcoin, the most prominent cryptocurrency, has been dropping for months, with one point falling to $19,149 on Saturday.

The crash of 2 significant cryptocurrency projects, Terra-Luna and Celsius, has hastened Bitcoin's decline in recent weeks, raising concerns about the overall viability of the cryptocurrency industry.

The pandemic saw an increase in investing in Bitcoin and several cryptocurrencies, including high-risk wagers on assets such as "meme stocks," NFTS, and many more.

Bitcoin was created to revolutionize the way people transact online. Additionally, the digital currency is supported by a decentralized network of computers that records each transaction in a permanent ledger known as a blockchain.

The price of a Bitcoin increased twelvefold from March 2020 to November 2021, reaching $64,000. It also hit a record high of $20,000 back in November 2020.

After central banks filled the market with money, fueling inflation fears, some investors viewed Bitcoin as a safe area to put cash. Bitcoin has a designed supply limit, allowing only 21 million tokens or less. As of now, more than 19 million have been mined electronically.

PayPal and its affiliate Venmo, for instance, have launched bitcoin trading and shopping opportunities. Goldman Sachs and Morgan Stanley have also revealed plans to make cryptocurrency funds available to high-net-worth individuals.

Another payments company, Square, purchased $50 million in Bitcoin and renamed itself Block to reflect its engagement with blockchain. While Elon Musk's Tesla bought $1.5 billion from blockchain technology.

Cryptocurrency exchange Coinbase hit its peak in April of last year after it went public with a valuation of $85 billion, marking the industry's debut. At the time, Bitcoin surpassed $60,000 in value.

Are Investors Still Confident About Crypto?

As the sector spent substantially on lobbying, senators and mayors around the United States started to promote cryptocurrencies. Senators Cynthia Lummis (R-Wyoming) and Kirsten Gillibrand (D-New York) have even proposed legislation to create a policy structure for the market, giving the Commodity Futures Trading Commission (CFTC) more authority.

New York Mayor Eric Adams, who won in November, stated that he would accept Bitcoin for his first three paychecks.

However, as the stock market fell, inflation rose, and unemployment hit the tech industry after confidence in crypto faltered, according to the NYT.

Investors began to lose faith in cryptocurrency and moved their funds to less hazardous products, and withdrawals caused some high-profile ventures to fail.

For instance, TerraForm Labs' stable coin TerraUSD and the crypto bank Celsius both crashed - losing billions of dollars and throwing the larger market into a nosedive.

This article is owned by Tech Times

Written by Joaquin Victor Tacla