In Q1, there was no stopping cryptocurrency. Bitcoin (CCC:BTC-USD) shot up to an all-time high above $64,000. Cryptocurrency bled into the mainstream in an unprecedented way, and it’s likely there to stay. However reality is catching up to the bulls. Bitcoin prices are below $50,000 this morning, and it is a sobering moment for the whole asset class. With Bitcoin tanking after such a huge few months, many are wondering, “Why is crypto down today?”
Calling Bitcoin the biggest cryptocurrency would be a huge understatement. Bitcoin is in fact so much bigger than other cryptos, it regularly holds well over half of the entire industry’s market capitalization. So, when Bitcoin hits a slump, it ripples through all other digital currencies.
The last few days have undone a lot of progress for Bitcoin. Fears of a growing crypto bubble and national crackdowns on crypto are tanking Bitcoin prices today. Some think it is just a moment to breathe before another upward run. Others think it’s a sign of further correction ahead.
Why Is Crypto Down Today?
One of the primary reasons for Bitcoin’s dip below $50,000 is the recent ban on cryptocurrency in Turkey. Citing a lack of regulation by centralized authorities, the ban is set to take place on April 30. Once it goes into effect, holders will not be able to use cryptos to facilitate transactions. The announcement prefaced the initial dip in Bitcoin prices that has turned into bigger losses today.
The country is making news again this morning after police announced they had warrants for 78 people involved with the Thodex crypto exchange. Thodex recently went down for unannounced maintenance, angering users of the popular exchange. A resulting raid by the Turkish government led to the arrests and the resulting dip in Bitcoin prices that has followed.
Across the Atlantic, the U.S. also has big news that is introducing volatility to the crypto market. According to a Bloomberg report, President Joe Biden is looking at hiking capital gain taxes to nearly double the current 20%. The hike would target not just traditional stock traders, but crypto traders as well.
Finally, some are seeing the Bitcoin losses as a result of the crypto bubble reaching a pop. While this reason is more hotly debated that the recent government news, it’s still leading to large market selloffs. CryptoQuant CEO Ki Young Ju is of the camp believing that Bitcoin’s bull market is going to continue, although he is noting this morning that the industry may have a correction coming soon that could lead to more panic selling.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article.
