Cryptocurrency market has seen a major downfall in the month of May where most major cryptocurrencies including Bitcoin, Litecoin, and Ether traded in the bearish consolidation sector. The global risk associated with it and the misconception revolving around cryptocurrencies result in the debasement across many cryptocurrencies during the month of May.
Mt Gox Bitcoin (BTC) Dump:
If you remembered, a theory postulated regarding the loss of over $50 billion in market capitalization in the crypto market. However, the market capitalization 24 hours prior was at $440 Billion but dropped to levels of $389 Billion. This results in the decrease in price values of between 7%to25%, in just 24-hrs. Also, the Mt Gox Dump could’ve enhanced the sell-off. However, that’s not the only reason for affecting the value of crypto-coins and tokens in the market.
But, we can’t deny that the Shibuya, Tokyo based Bitcoin exchange is often criticized for triggering unnecessary panic in the market.
New Regulations & Taxation
Another reason we saw in the downfall of cryptocurrencies during May month is implementing new regulations and taxations rules for crypto-users to provide more safety to the investors. The probe launched by US Department of Justice (DoJ) and South-Korea’s biggest crypto-exchange block operations in multiple countries in order to abolish money laundering and increase compliance.
Even one of the world’s leading crypto-exchanges requested investors to submit their Tax IDs before May 24. Instead, of following new regulation, investors started withdrawing from the exchange. However, the implementation of these regulation and taxation will help to gain legitimacy. But, it definitely influenced the cryptocurrencies in May-month.
Bitcoin as a Major Sentiment Indicator
Bitcoin is considered as a major sentiment indicator in the crypto market and tells pretty much about the potential recovery.
It is the Bitcoin which gives the first hint on the possibility of recovery. Or you can say, it is a standard or representative in Blockchain technology and cryptocurrencies.
So, any fluctuation in the Bitcoin value may influence the crypto market.
And since there are issues revolving around the Bitcoin in different countries over its usage. The result, the Bitcoin changed the perception of many equity investors towards the cryptocurrency. Also, the engagement of women in the cryptocurrency is very low. If it keeps going then the crypto market will be at the bottom.
Final Thoughts: –
Given, how cryptocurrencies suffered this month. There is less possibility to recover soon. There are still arguments over the usage of cryptocurrencies which varies with the countries. Nevertheless, we’ve already seen many ups & downs in the crypto market and this is clearly not the first time.