Crypto Hits a Speedbump

By Guest Author
Published June 14, 2021 Updated June 14, 2021
Best Buy In

DeFi Platform




Crypto Hits a Speedbump

By Guest Author
Published June 14, 2021 Updated June 14, 2021

Cryptocurrency has been the cowboy of the markets lately, particularly for the last 18 months, riding high and then falling off the horse, but getting back on and continuing the journey of mountainous volatility. As the year began, some cryptos reached all-time highs, but in May these came crashing down as cryptocurrencies took a serious knock, with Bitcoin and Ethereum prices both sinking by double digits between the middle and end of May. Now, the crypto market has lost a significant $1 trillion from its all-time high of $2.5 trillion in the middle of May. Let’s take a closer look at what caused this crash, and what else 2021 has brought for top cryptos. Read before you invest in Bitcoin, Ethereum and Binance Coin prices as CFDs.


In April, Bitcoin hit a record high of over $63,000 and the crypto looked like it was on a rocket ship to the moon in the first quarter of 2021, as well as the beginning of the second quarter. With huge amounts of institutional investment and acceptance into mainstream payment methods, Bitcoin appeared to be on the up and up. Then, all of a sudden, things hit a wobble when Bitcoin prices fell to the $35,000 mark at the end of May. This price plummet rocked the boat for many investors, however, if you’re familiar with Bitcoin, you’ll know that the king of crypto is notoriously volatile and big crashes like these are not uncommon. Some of the big factors contributing Bitcoin’s recent decline include Tesla changing their mind on their acceptance of Bitcoin as payment for electric cars, and China putting up red tape for cryptocurrencies which banned both mining and trading. Factors that impact the longevity of Bitcoin have played a part in some of its previous crashes, and as such, China’s decision to put restrictions on crypto and not allow its citizens to invest in Bitcoin CFDs or even use it to pay for transactions has had ramifications that are far reaching for Bitcoin and other cryptos. In the past Bitcoin has plummeted by an eye-watering 80% and still managed to recover—and even grow—by 300% over the last year, which could bode very well for the future of Bitcoin after its most recent crash. However, this can’t be guaranteed, so if you invest in Bitcoin prices, it’s important to remember that cryptocurrencies are volatile instruments which are often subject to change, and you should keep a close watch on any news relating to Bitcoin to try and stay ahead of the markets before making any trading decisions.


Earlier this month Ethereum made huge gains, hitting an all-time high of over $4,300, but in a similar fashion to Bitcoin, fell by 40% in May down to the $2,300 mark. But all is not lost for Ethereum, as the Bitcoin rival has managed to claw back 8% and was trading at $2,587 by the end of May. Ethereum has had worse falls than this, as it once plummeted by 90% in one year and still managed to recover, which could help bolster sentiment for the situation the crypto finds itself in now. So does the fact that Ethereum is up by a gigantic 1,150% over the last year and has propelled itself into the running as a strong competitor for Bitcoin. While Bitcoin remains the world’s largest crypto, Ethereum managed to close the gap between itself and Bitcoin by $350 billion in May, largely as a result of the crypto drop and Bitcoin’s significant decline. Ethereum’s total loss for the month of May levelled out at 11% and recently, Cathie Wood, a well-known investor, staked her support for the second largest crypto. The continued support of high-profile investors and celebs, along with Ethereum’s fast growth rates, could give the crypto a bright future in the markets.

Binance Coin

Binance Coin (BNB) became the third largest digital currency in the world earlier this year when the it hit a market cap of over $100 billion. Since then, it has dropped down to fifth place behind Cardano (ADA). At the end of April 2021, Binance Coin gained 20% on its price in just seven days. Since the start of the year, Binance Coin has continued growing to new heights, and now makes up 4.5% of the total crypto market cap. However, this up-and-comer crypto experienced a decline in May, along with most other cryptos, totalling a 44% price drop for the month. The CEO of digital exchange at Binance, Changpeng Zhao, offered a few words to those who are thinking about investing in the price of Binance Coin: “Don’t buy BNB if you haven’t spent more than three full days learning about it. Its ecosystem is large and will take a while to understand. Don’t just buy it because its price has been going up.” It’s hard to say what’s next for Binance coin but it’s worth keeping a close eye on and learning more about it, as this crypto remains a top five contender in the markets.

The bottom line

When it comes to cryptos, no matter how popular they get, volatility is still the name of the game, giving those who invest in Bitcoin and other cryptos as CFDs both opportunities and risks. CFDs, or Contracts For Difference, allow you to invest in price changes in both directions—increases as well as decreases—without the need to purchase the underlying asset. Essentially, you’re able to trade on volatility without having to purchase any actual bitcoin. But like Zhao said, regardless of what crypto price you’re thinking of investing in, it’s worth doing your homework and learning as much as you can so you’ll be able to make more informed trading decisions.


The presented content may include the 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 your personal financial loss.
About Author
Guest Author
699 Articles
This author could be anybody, but he/she is not a member of staff and opinions in the article are solely of the guest writer and do not reflect Coingape's view.

Loading Next Story