Bitcoin Under Pressure, Price Continues to Plunge: Causes
Bitcoin is under intense pressure.
Bitcoin, the world's largest crypto asset, is under intense pressure, with its price continuing to plummet in recent times. Although Bitcoin is known for its high volatility, the recent price drop has raised concerns among investors. One of the main factors causing Bitcoin's price to continue to plunge is the macroeconomic concerns that have hit the global market.
1. Macroeconomic Concerns
One of the main causes of Bitcoin's price decline is global economic uncertainty. Economic tensions in many countries, including high inflation, looming recession, and tighter monetary policies, have created instability in the overall financial market. Investors, who usually turn to safe assets such as gold, are now also avoiding high-risk investments, including Bitcoin.
The policy of increasing interest rates implemented by central banks in many countries, especially the US Federal Reserve, is one of the factors that adds to this uncertainty. Interest rate hikes tend to increase borrowing costs and reduce liquidity in the market, which has a direct impact on the prices of high-risk assets such as Bitcoin.
2. Tight Regulation
In addition to macroeconomic factors, regulatory uncertainty is also a threat to Bitcoin prices. Many countries have begun to tighten supervision of cryptocurrencies, by proposing stricter regulations regarding the use and trading of crypto. For example, China has banned Bitcoin trading several times, as well as other countries that have begun to limit or even ban transactions using crypto.
Concerns about the potential for stricter regulations have affected market sentiment, where investors have begun to withdraw from the crypto market, causing the price of Bitcoin and other cryptos to decline.
3. Declining Institutional Interest
In recent months, interest from institutional investors in Bitcoin and other crypto assets has also decreased. Many large institutions that previously supported Bitcoin, such as large technology companies, have begun to reassess their investments in this sector after seeing extreme volatility and growing regulatory uncertainty.
Most institutional investors tend to be more cautious in making investment decisions amidst the uncertain economic situation. This has caused demand for Bitcoin to decline, which in turn has affected the overall price of Bitcoin.
4. Declining Trust in Crypto
Finally, the decline in Bitcoin's price is also due to the decreasing trust in crypto as a form of long-term investment. Although Bitcoin and other crypto assets were once seen as an alternative store of value, the sharp price volatility and the negative impact of bad news related to crypto have made many people hesitant to invest in Bitcoin.
Doubted security, as well as ongoing hacking and crypto theft incidents, have further tarnished Bitcoin's image in the eyes of most investors.
Conclusion
Bitcoin is currently facing various major challenges, both from a macroeconomic perspective and internal factors of the crypto market itself. Although the price of Bitcoin is still very volatile and can improve, the pressure it faces shows how crypto is still an asset that is very vulnerable to changes in the global situation.
For investors, it is important to understand these factors and consider the risks carefully before deciding to jump into the Bitcoin or other crypto market.