Bitcoin has had a rough period, going down in value from $20,000 to about $8000 in several months. This turn of events made a lot of investors nervous, especially those who hoped to profit from short-term trading. While some see the situation as a sensible market correction, others suspect some kind of deliberate market manipulation. So what are the reasons that contributed to the current slump in prices?
Cryptocurrencies stellar growth in the last years made governments around the world cautions about the new technology, with possibilities of fraud and tax evasion being the primary concerns. So the regulation attempts followed. China swiftly prohibited domestic exchanges and ICOs, which reflected badly on the market. The rumors of a similar ban in South Korea in 2017 upset the markets even more, although the rumors later proved to be false. Just recently, on March 8th, The United States SEC’s announced that crypto exchanges must register with the organization, which coincided with bitcoin losing about $2000 in its value in just a couple of days.
Another reason which impacted Bitcoin was a bit unexpected. One by one, big media giants decided to impose self-censorship and ban crypto-related advertisement from its platforms, citing concerns for users ‘safety. Facebook started the trend in January, Google and Twitter joined in March. Again, the markets weren’t happy with this and bitcoin slipped again, losing $600 in one day.
Finally, we can point out some psychological reasons behind the current financial trends. The sensationalist press creates excessive panic, which in turn causes more people to sell and the bitcoin price to fall even lower, creating a vicious cycle.