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Is Bitcoin dying? Is it the end of cryptocurrencies?

By Crypto4you23 | Cryptoanswers22 | 13 May 2023


The idea that Bitcoin (BTC) provides a safe haven from macroeconomic issues, including the recent banking crisis in the US, appears to have lost some of its credibility.

Despite the sharp decline in deposits reported by PacWest Bancorp, which caused the US bank's shares to plummet by 22.53% and added to the sector's ongoing struggles in the country, the leading cryptocurrency suffered a significant blow.

Over the past 24 hours, Bitcoin has dropped by 4%, trading at around $26,371 as of 8 a.m. on Friday, May 12th.

In the early hours of the morning, the crypto asset reached its lowest price in two months at $26,100.

According to Edward Moya, a senior analyst at the market maker Oanda, "Bitcoin's decline is due to the risk aversion that is currently prevalent on Wall Street.

This time, the renewed nervousness in the banking sector, specifically at PacWest, was not sufficient to generate strong demand for cryptocurrencies."

Last month's significant upgrade to Ethereum (ETH), known as Shanghai, was unable to prevent the cryptocurrency's value from falling by 3% to $1,766 - its lowest price since March.

In contrast, the meme-inspired Pepe Coin (PEPE), which experienced a massive 10,000% increase in April, lost 24% of its value.

Among the top 10 altcoins, only XRP (XRP), up 1%, Cardano (ADA), up 1.20%, and Dogecoin (DOGE), up 0.4%, showed any signs of opening higher.

Many analysts believe that the recent decline in cryptocurrency prices is due to the overall market sentiment being affected by concerns over inflation and rising interest rates.

Bitcoin and other cryptocurrencies have traditionally been viewed as a hedge against inflation, but as interest rates rise, investors are looking for other assets that can provide a better return.

Additionally, with many countries now looking to develop their own digital currencies, the competition for investors' attention is heating up.

The decline in cryptocurrency prices has also been attributed to increased regulation and crackdowns by governments around the world.

China, for example, has recently banned financial institutions from conducting cryptocurrency transactions and mining operations.

This has had a significant impact on the overall cryptocurrency market, as China has historically been one of the largest markets for cryptocurrencies.

Some experts believe that the decline in cryptocurrency prices may be temporary and that the market will bounce back once the current issues are resolved.

They point to the growing adoption of blockchain technology and the increasing number of companies that are investing in cryptocurrencies as evidence that the market is still growing.

Additionally, they argue that the recent decline in prices may be an opportunity for savvy investors to buy cryptocurrencies at a discount and make a profit when prices rise again.

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