Why is the Cryptocurrency Market Crashing Yet Again?

Bitcoin and Dogecoin prices have dipped drastically to 10 and 12 percent respectively.

On May 19th, Wednesday, the cryptocurrency market started dipping with Bitcoin and Dogecoin crashing down in its prices. This pressure is being witnessed after the exponential increase of the market values of many cryptocurrencies recently. We witnessed how the Dogecoin frenzy brought down many crypto exchange networks like WazirX. However, Dogecoin has already been having a very volatile market with its prices rising and falling in a 24 hours gap. Ethereum, which rose to popularity recently with hitting record heights of market value also weighed down with more than 10% declines in the prices these days.

Among all these cryptos, the most astonishing crash was that of Bitcoin, which dipped to a price of USD37,525 with a decreasing value of more than 15% in the last 24 hours according to Coindesk. As the major sell-off that began a month ago still continues, Bitcoin has fallen to an all-time low in several months. This sudden crash can be the result of incidents that happened last week. On May 12, Elon Musk tweeted that Tesla has suspended the sale of Bitcoin and the use of it in any transactions. The decision was due to environmental concerns. Tesla's CEO cited that Bitcoin mining uses fossil fuels that have the worst emissions. According to a CNBC report, this comment by Musk had wiped more than USD300 billion from the entire cryptocurrency market on that day.

After this came the crackdown from the Chinese Banking industry as it issued a statement that warned against the trade and exchange of cryptocurrency. According to reports, this statement was a step towards China's clampdown on the virtual currency and its growth. The tumble-down of Bitcoin prices after these two consecutive statements was huge. According to the Times of India report, the Chinese statement warned the crypto consumers against wild speculation and added that the investors should bear the losses caused by the transactions and Chinese law will not provide them any protection. The Tesla CEO's announcement sent shockwaves to the crypto community as Musk had recently announced that he bought Bitcoin worth USD1.5 billion. The cryptocurrency market is under a serious collapse, and traders and investors are under pressure. We need to wait and see how the market is going to change in the coming days.