The rise in interest rates in the market sector and the effects that the Ukraine war has posed to the traditional market have also spread and reached the crypto market, making the industry see a crash in crypto prices, especially Bitcoin. The price meltdown caused investors and institutions to fear the market. Many questions about whether the price could drop to zero and the crash could lead to the market’s collapse make people panic, but the answer is that if there is a dropping trend, then the market can never die, and they should not worry. There are several reasons for the lower price, including correlating with the stock market, liquidity, a regulation whereby some countries are already adopting regulations impacting the cost of the crypto, and breaches in security, among others. Cryptocurrency has existed without being backed up by any assets since it emerged as a medium of exchange. The adoption rate is high, so people joining the market have intertwined it with the traditional market. The two operate differently, bringing them together to work together then there is the drop. Digital currencies are decentralised. Some countries like Brazil have taken a step in regulating digital currencies. When the government starts mining crypto then, the prices decline because the government handles its costs, which had not been the nature of digital currencies. There are significant influences on crypto.
People like Elon Musk could be volatile, whose tweets can lead to inflowing capital. When there is a shift in the market, people may keep going out and into the market with the use of stablecoins, and for this reason, specific crypto may see a crash. The blockchain has security fears. Often, the investors hear and come across scammers who con them of their assets. The chances of retaining the market are rare; at this point, the investor quits the market. Digital currencies operate with the use of blockchain technology, and although the transactions are recorded on a ledger, the market is not so safe from scammers. These people fear the investors; hence security breaches also account for the price decline.
