Cryptocurrency has seen a renewed bullishness for the first time in a while. The major crash of late spring led to a price drought through June and July. Many have turned their attention away from digital currency; tech earnings, the electric vehicle (EV) race heating up and short squeezes have helped distract investors from the faltering crypto industry. But a resurgence is prompting a whole new wave of interest, and buyers are helping to drive major crypto plays back up on track toward all-time highs. Today, with prices faltering slightly, investors are worriedly clamoring to know: Why is the crypto market down today?
Fear not, the industry is not falling back into disarray. This downturn in the market is being provoked by a number of factors. They’re nothing the asset class hasn’t overcome before, either. As CoinDesk reports, digital currencies are facing resistance as Bitcoin (CCC:BTC-USD) approaches the $50,000 mark for the first time since its $30,000 price-plummet. This is a milestone price, and, of course, selling is going to pick up at such a value. As a result, the coin is down 5% at the time of writing.
Of course, crypto price trends are often tied to whatever Bitcoin is doing. Thus, the price action is sending other cryptos lower in sympathy. Ethereum (CCC:ETH-USD) is down over 7%, Dogecoin (CCC:DOGE-USD) is paring similarly sized losses and Cardano (CCC:ADA-USD) is down over 8%.
Why Is the Crypto Market Down Today? Celebrity Influence Wanes, Government Regulation Picks Up
Crypto can’t be bailed out with a celebrity tweet anymore, and that’s keeping the asset class held down today. Investors are noticing that prices aren’t as affected as they once were by outside influencers. CoinTelegraph reports that a tweet from Michael Saylor, CEO of MicroStrategy (NASDAQ:MSTR), would bump up Bitcoin value by an average of 4.4% in Q2. However, the CEO now has over 2,200 tweets, almost all about Bitcoin, and the effect seems to be exhausted.
This social media phenomena has long been wearing thin. But also, the increasing likelihood of crypto regulation in the U.S. is playing a part in keeping crypto held down. With proposed legislature that would allow the Treasury to veto the creation of new stablecoins, and impose taxation for crypto mining, the proposal is souring investors’ future visions for digital assets.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.