Cryptocurrency: Why Is The Trend Decreasing?

Cryptocurrency: Why Is The Trend Decreasing?

By Trending | Expert | 30 May 2021


Cryptocurrency: Why Is The Trend Decreasing?

 

The cryptocurrency trend has been plummeting for a few months now, with cryptocurrencies losing 75% of their value. This is pretty scary for those who are invested in the market, and it’s also worrisome for those who are invested in the technology behind cryptocurrencies.

Cryptocurrency: Why Is The Trend Decreasing?

What is cryptocurrency?

Cryptocurrency (sometimes called digital currency) is a digital, electronic currency. Some cryptocurrencies are stored electronically in your computer or mobile phone. These are known as “mobile or online” cryptocurrencies. Other currencies (known as “hardware” cryptocurrencies) are stored electronically in a physical wallet, such as a USB drive or a digital storage device. These are known as “hardware” or “offline” cryptocurrencies. These are some of the key differences between cryptocurrencies and standard currencies. 1. Coins or Paper Currency Aren’t Real We all know that physical currencies are paper currency printed by banks, the government, and other companies. They aren’t actual, physical coins or bills; the banks print them on a computer or piece of paper.

 

The role of cryptocurrency

First off, let’s understand what cryptocurrencies are, and how they work. In essence, a cryptocurrency is an alternative currency system that is run through the use of cryptocurrency. This is different to how most government currencies work, as they are backed by the government. Why would anyone want to do this? Well, because they want to escape the traditional banking system and adopt an alternative system that they control themselves. You can think of cryptocurrencies as an online version of the hard currency money you might have in your bank account. They are money that are essentially bought and sold online without the need for a central authority in charge of it. They’re digital, and come in a range of colours, shapes and sizes.

Cryptocurrency: Why Is The Trend Decreasing?

The crypto-economy

Cryptocurrencies aren’t really things that exist in the real world. Rather, they exist on the Internet. They’re decentralized digital currencies. Users can buy and sell the coins on cryptocurrency exchanges, and the coins are stored on their digital wallets, a piece of software that is encrypted. Users store their coins on their own computers, servers or on online exchanges. If someone needs to transfer their coins from one wallet to another, they enter a public address and a private key in the exchange, and it’s verified by the network. All of this is digital, which means there’s no physical storage to worry about if the value of the coins drops. Why Is The Trend Decreasing? Since the turn of the year, the total value of cryptocurrencies worldwide has dropped significantly.

 

Why is the trend decreasing?

Back in December, millions of people all over the world were buying cryptocurrencies in a frenzy. However, after the MARCH 2021 surge, many people began to take profits. Investors are getting ready for a cryptocurrency crash, as the market has been unable to stabilize after its meteoric rise. According to Bloomberg, there are signs that the market is ready for a huge correction. Some indicators include the price of Ethereum, which is trading near its $10,000 peak of last year.  a major cryptocurrency project, was created to make payments faster, but investors seem more interested in smart contracts. However, not all investments are worth it. Some more reasons include people selling their crypto for profits and government of china prohibiting the use of  cryptocurrency .

Cryptocurrency: Why Is The Trend Decreasing?

Conclusion

There are a few factors that have affected the trend for cryptocurrencies in 2018. First of all, the introduction of SegWit technology made it so that transactions could be processed faster and the energy consumption reduced by a lot. Secondly, as I mentioned earlier, there are now more payment processors for cryptocurrencies available, allowing people to buy and sell them much more easily. Thirdly, the American government has introduced a few bills that would greatly restrict the operation of cryptocurrency. Other Developments Since then, we’ve seen a lot of other developments that can be interpreted as a result of the decreasing cryptocurrency trend. A lot of retail investors have lost faith in cryptocurrencies and are now getting out, or reducing their investments.

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