Cryptocurrency value

Bitcoin Price: Why Cryptocurrency Value Collapsed After Record High

The price of Bitcoin collapsed on Sunday, after hitting record highs of over $ 64,000 (£ 46,000) earlier in the week.

Its value fell below $ 54,000 (£ 39,000) – a drop of 15% which was its biggest single-day drop since February.

The value of the cryptocurrency has recovered slightly since then and is now trading at around $ 57,000 (£ 41,000).

Sunday’s crash also influenced other cryptocurrencies, including Ethereum, although the Dogecoin coin – which has risen recently – has avoided any real damage.

Why did Bitcoin crash?

The price of Bitcoin had slowly fallen since it hit its all-time high on Wednesday.

Galaxy Digital capital market CEO Mike Novogratz warned last week that Coinbase’s IPO could significantly affect the cryptocurrency market.

The world’s second largest cryptocurrency exchange debuted on Wednesday and created a crypto frenzy.

“Next week we could definitely have some volatility due to the excitement around Coinbase,” he said. MarketWatch.

“It never ends well, so we’ll probably have a wash at some point.”

Meanwhile, some have suggested Sunday’s crash may have been caused by power outages in China.

What could happen next?

Despite the crash, the price of Bitcoin is still around double at the start of the year, and about five times higher than last October.

Its value has been increased by the support of Tesla and Paypal.

Tesla announced in February that it had invested $ 1.5 billion in Bitcoin, while Paypal now allows people to use cryptocurrency to buy and sell on its platform.

Mastercard also plans to start supporting Bitcoin payments later this year.

The UK government is setting up a task force to decide whether the Treasury should create its own digital currency.

Only the Bahamas currently has a national digital currency, although China is currently testing the concept.

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