What’s causing Bitcoin to Drop?

Question

Investors are a bit worried about the sudden decline in the price of Bitcoin. What’s the reason behind sudden drop of the bitcoin value?

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Delta 3 months 1 Answer 66 views 0

Answer ( 1 )

  1. Bitcoin and cryptocurrencies in general have shown a high level of correlation with the U.S. stock market, possibly due to the overall drop in investor appetite for high-risk assets during COVID19 pandemic. The steep correction in the U.S. stock market together with a lack of buying demand as Bitcoin’s price fell to the low $5,000 levels ultimately led the price to decline to $3,600.

    In the aftermath of the 50% drop in the price of Bitcoin, top industry executives that oversee the sector’s largest investment firms expressed their belief in the asset class and confidence in the long-term trend of the market.

    Michael Sonnenshein, the managing director at Grayscale — which oversees the Grayscale Bitcoin Trust, a publicly tradable Bitcoin investment vehicle with around $2 billion in assets under management — said that he hasn’t doubted his faith in the cryptocurrency industry and the community amid this extreme volatility

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