Bitcoin is the oxygen of crypto currency market. The market breathes in the presence of Bitcoin. Being the largest cryptocurrency in the world, Bitcoin also effects the performance of other coins being traded in the market. That is why, a lot of news regarding surge and decline of Bitcoin circulates in the business media. And this is what happened last week. The whole business community in the world succumbed to the shock when Bitcoin crashed to its lowest level since its peak in November 2021.
The most significant crypto currency Bitcoin lost 40% of its value since its peak in November’21. In November last year, the coin was traded at a value over $69,000. On last Saturday, the reported value of Bitcoin was roughly $35,000. As of January 28, 2021 the value of Bitcoin in market is $37,000
Experts blame US Federal reserve the culprit for the crypto crash. The Federal Reserve hinted the possibility of increasing interest rates by March. The fear of withdrawing stimulus from market led the crash in the value of Bitcoin, and other significant cryptocurrencies in the world.
EFFECTS ON MARKET
Not just Bitcoin, but the crypto currency market as a whole suffered from the crash. Big guns like Ethereum, Finance Coin and Cardano had a significant reduction in value. Moreover, Solana, Dogecoin and Shiba Inu also dropped massively.
EFFECTS ON FINANCIAL STABILITY
The recent crash in market has posed a great threat on the financial stability of several countries. The affected countries have been top-listed in crypto adoption. Bitcoin is considered a digital asset, and is widely adopted in this age of digitalization. Due to this adoption, the market value of digital assets have rose to nearly $3 trillion. The highly volatile nature of crypto market, especially Bitcoin has therefore posed a threat on the financial stability. Thus, the recent crash has forced the finance experts to bring their heads together. They are trying to formulate a global regulatory framework to work out these problems
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