Cryptocurrencies are risky, and it needs a lot of knowledge and market research to be able to master the art of dealing in cryptocurrency. However, this does not take away the fact that it is a volatile territory and the future is always very uncertain.
Prices of all the major cryptocurrencies have dropped massively in the last 24 hours and is still moving along the downward slope. On May 19, 2021 Bitcoin, the most popular cryptocurrency out there was trading at INR 28.5 Lakhs. The currency had seen its highest point last month when it traded at INR 40 Lakhs. Etherium, another popular cryptocurrency, was trading at INR 1.8 Lakhs. DogeCoin has fallen to INR 21 and Shiba Inu coin, which was making the headlines very recently, dropped by over -48 per cent to INR 0.000710.
The prices of these currencies are dropping on all crypto platforms. The prices of all the currencies are in red and are constantly dropping. The drop might seem surprising or even dramatic to a lot of people but the volatile nature of crypto should not make it a surprise for a lot of people.
Why is it happening?
Reports suggest that Bitcoin 3.5 month low on Wednesday, May 19, 2021, after China banned financial payment institutions from providing services for cryptocurrencies.
According to Avinash Shekhar, Co-CEO of ZebPay, a nearly 40 per cent dip in the bitcoin price from its all-time high looks dramatic but is normal in many volatile markets, including crypto, especially after such a large rally.
"A nearly 40 per cent dip in the bitcoin price from its all-time high looks dramatic but is normal in many volatile markets, including crypto, especially after such a large rally. Such corrections are mainly due to short-term traders taking profits. Long-term value investors might call these lower prices a buying opportunity, as MicroStrategy just did,” Shekhar said.
The price of Bitcoin has been seen falling ever since Tesla invalidated cryptocurrency as a payment mode to buy their cars. Elon Musk has been a great influence on the crypto market and the decision coming from his own company did not sit well with the market.
Should You Consider Investing?
Cryptocurrency is, and always will be, a very risky avenue. However, experts suggest that dips like these are very common and one should try and buy some more currencies as an investment for the future. This might be a good time for people to buy as the prices haven't been this low in months. Another important thing to keep in mind is that if people have important savings invested in cryptocurrencies, then it is best not to touch the investment and observe the movement for a few more days. Taking out the invested money at a loss might not be a good idea and the situation definitely does not call for panic.
The market is hostile, patience is the key.