The price of the bitcoin dropped to $11, 870 that is about 14% decline in the last 24 hours. Following to the reports of China cracking down on the cryptocurrency again, it may seem like a valid reason for the bitcoin drop but the logic defies the same.
Red Alert in Crypto Market
Bitcoin has plummeted to its lowest level in more than a month. It has dropped about $2,000 after price manipulation revelations, government regulations and hacks. These losses are spreading to other crypto assets, viz. ethereum declining 19% and ripple also declined about 29% that marks a third of its price, as per Coinmarketcap. Actually, by market capitalization, all the top 20 cryptocurrencies are in the red today.
Is China really the Cause OR is it something else at play!
This market plunge has been a few hours after multiple Chinese public companies explained that they didn’t and will not tap into any blockchain space. This move came after Xunlei was questioned about its IMO i.e Initial Miner Offerings. Another bitcoin miner-manufacturer that is based in Shenzhen issued a statement where he said that his business hasn’t generated much profit.
A global leading electronics manufacturing services provider, KAIFA or Shenzhen Kaifa Technology that produced about 150,000 bitcoin miners this month only for domestic mining companies, disclosed its financial statement to clarify that it isn’t a blockchain company. The interesting thing is the shares of KAIFA had risen more than 15% only because the public regarded the company as a blockchain technology.
Many big companies in China such as Sichuan Shuangma Cement Company, U9 Game among others reported that they are not going to invest in the blockchain technology, notwithstanding their previous interest to invest.
Though the real reason behind such a massive decline in the cryptomarket is not known yet, it does make sense that a few holders are making this change in the market. Moreover, the cryptocurrency market has already started its ascent!
In our opinion
Right now, the media sources, investors, and people are considering the Chinese government’s move on local miners the cause for cryptocurrencies market dropdown. However, it doesn’t make any logical sense. China has already banned cryptocurrency exchange (3 times in a year) about 4 months back and now it has about 0 volume in the cryptocurrency market. Logically, China is not in a position to affect the market of bitcoin.
What do you think can be the reason for this recent breakdown? Let us know in the comments below.
The presented content may include personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for you personal financial loss.
Disclaimer The views, opinions, positions or strategies expressed by the authors and those providing comments are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of CoinGape. Do your market research before investing in cryptocurrencies. The author or publication does not hold any responsibility for your personal financial loss.
I am an entrepreneur and a writer with a bachelors degree in Computer Science. I manage the blockchain technology and crypto coverages at Coingape. follow me on Twitter at @arya_achal or reach out to me at achal[at]coingape.com.