The last few weeks have been a bit rough for many cryptocurrencies.
Since the start of this month, leading cryptocurrencies Bitcoin, Ethereum, and the entire crypto-verse have dipped quite a bit.
Bitcoin’s value fell by 10% at the start of December, and while it has since stabilised, we’re still not out of the red. For example, on Monday, December 20, Ethereum (ETH) fell to $3,897.23 after reaching an all-time high of $4,900 at the start of November.
What’s causing the dip?
While linking price movements to specific events might be difficult, experts believe that two significant events this month have contributed to the drop in value.
- Evergrande’s loan default: China’s Evergrande is one of the biggest property developers in the world. To finance their development, they borrowed substantial amounts from some of the world’s biggest lenders and are now unable to pay back. The default has caused panic in the global financial markets, and people are selling off their highly volatile assets — such as high yield bonds, penny stocks, and, wait for it, cryptocurrencies.
- The new COVID variant: Fear of lockdowns and their potential effect on the financial health of the economy and job security forced people to sell their high-risk assets, which, again, include cryptocurrencies.
Is this something to be worried about?
According to crypto experts, not really.
Experts point out that the high sell rates are triggered by fear, but as we have seen in the past, the crypto market often bounces back, and a rise is around the corner. Just HODL on 😌.
In addition, Bitcoin’s hash rate is going strong. It means that Bitcoin miners are willing to invest more time, money and effort into the currency, which indicates confidence.
Best play? Investing in crypto is highly speculative. While sceptics are quick to sell, others like El Salvador’s President and investment professionals believe past crypto trends point to a rise around the corner. So this may be an excellent time to begin your investing journey or solidify your positions.
