It came as a shock to many when Bitcoin fell lower than $7,000 as the price of many other leading digital currencies dropped. The world’s top cryptocurrency plummeted by 8%, standing at $6,782.64, as reported by to CoinDesk, an industry that monitor’s prices across multiple exchanges.
According to Mati Greenspan, a market analyst, this change was less linked to the recent fears of the emergence of a global trade war and more connected with traders reassessing assets in their portfolio and assigning them fixed values.
How people manage their portfolios has a lot to do with the drop of cryptocurrencies in the stock markets particularly in the past few weeks. This occurs as more brokers are adding bitcoin thus creating more liquidity bridges.
Ethereum and Ripple which are the second & third largest cryptocurrencies respectively in the market both experienced significant drops at the end of last month. Ethereum dropped over 9% to $375.31 whereas Ripple went down over 10% to 50 cents.
Fears of a Trade war
China allocated new tariffs on 106 American products the same day Bitcoin, and other cryptocurrencies dropped— a move that scared investors and also triggered fears of an impending trade war.
And there’s reason for Bitcoin merchant account holders to worry because Cryptocurrencies, e.g., Bitcoin, are decentralized and not supported by governments which makes them exceptionally volatile assets. Now investors are taking off to safer investments and leaving cryptocurrencies in a bid to seek protection.
The possibility of a trade war has brought in fear, and now markets will operate during certain periods based on exogenous factors.
Most of us didn’t see Bitcoin suffer in 2018’s first quarter. But contrary to many peoples’ expectations, it has had the worst start to a year for the first time, dropping almost 48 percent. These results are disappointing keeping in mind that the cryptocurrency hit an unprecedented high— nearly $20,000— in December.
Author Bio: Electronic payments expert Blair Thomas co-founded eMerchantBroker, America’s leading Bitcoin merchant Account provider serving both traditional and high-risk merchants. His passions include producing music, and traveling to far off exotic places.