5 Possible Reasons Behind the Big Bitcoin (BTC) Consider It The big decline in the crypto money market is due to many factors. The main factors behind this decline are Elon Musk’s statements, the news that China has banned crypto coins, the fact that the last day for Americans to file tax returns is May 17, investors are liquid in their leveraged positions, Tether’s statement that dollar reserves are not supported contrary to what is in theory, liquidation in leveraged markets and other factors.
Elon Musk’s Influence on Bitcoin
Elon Musk’s Twitter posts are already known to have a significant impact on crypto money prices. After Elon Musk’s tweets, sudden and high declines occurred in crypto coins, especially Bitcoin. After this movement, Tesla sold $ 1.5 billion of Bitcoin assets in his hand. After this news, it caused larger sales in the crypto money markets and therefore triggered a big decline.
Chinese Government’s Impact on Bitcoin’s Decline
The Chinese Government does not accept cryptocurrencies as legal money. With the new statement, it is stated that they will take precautions about Bitcoin mining. Recently, the rise and fall in crypto coins and the transactions on speculation threaten the security of users. As a result, it was announced that Bitcoin mining and trading activities would be stopped. The restriction on transactions with crypto coins brought with it a sharp fall on the price of Bitcoin.
Time to File Taxes in the United States
The fact that the day for Americans’ tax returns has come may have caused investors who hold crypto assets to sell. Although this situation has not had as much of an impact as the other factors we have mentioned, we can say that it has triggered the big decline in Bitcoin and the crypto money market.
Impact of Leveraged Traders
We can say that everything goes normally for investors when prices rise. However, the declines in the market cause investors who trade with leverage to experience losses. In such cases, the losses of the users cause the decline in the market to increase. The decline in Bitcoin and other cryptocurrencies has caused investors who trade leveraged to be liquidated. This situation triggered the big drop in Bitcoin.
Tether’s Dollar Reserve Status
Tether, a stablecoin, is a token pegged to the US Dollar. We knew that for every Tether bought in the market, it held an equivalent amount of U.S. dollars in its reserves. This created an environment of trust for users. However, the Company refused to prove that Tether was actually backed by a full dollar reserve. This caused the trust in Tether to be broken. This timing of Tether, which is already on the market, combined with other factors caused a big decline.
Other Factors
We should not attribute the big decline in Bitcoin to a single reason. Apart from the effects we have described, inflation expectations, interest rate decisions to be taken and speculations affect the investment strategies of the users. In addition, the decision taken by the Governments can cause such big declines. The combination of all these factors increases the speculation in the market. The combination of all these situations is the main reason for the big decline in Bitcoin.
