According to the quoted source, one of the causes of the fall of the cryptocurrency is the announcements of the CEO of Tesla, Elon Musk, who recently announced that the electric car manufacturer will no longer accept bitcoin as payment for its vehicles due to concerns about the environmental impact of bitcoin mining.
China has also stepped up pressure on digital assets, and the US Treasury has unveiled new bitcoin tax plans, while the Federal Reserve has suggested the possibility of a digital dollar.
The evolution of bitcoin has influenced other cryptocurrencies as well. Binance, XRP and Polkadot suffered heavy losses this month.
Other assets, especially ether – the second largest after bitcoin and the proponent of non-fungible token (NFT) offerings – held up better. Ether fell by only about 6%. And dogecoin, which Musk repeatedly wrote about on Twitter, fell only slightly in May.
So-called stablecoins, such as Tether and USD Coin, which are linked to government-backed currencies, have performed better without major variations.
Bitcoin is recognized for its volatility, and prices remain above 25% higher this year, despite the fall in May.
Bitcoin fell from nearly $ 20,000 in December 2017, a peak at the time, to below $ 3,500 in early 2019.
The nearly 40% drop in bitcoin in September 2011 was actually the middle of a three-month drop from August to October of that year, in which prices fell by more than 35% each month. Bitcoin prices reached a low of $ 2 in October 2011 and are now trading at about $ 37,000.
Wall Street analysts are facing an almost impossible task when trying to predict Bitcoin’s path, Bloomberg wrote recently, after the crypto market lost $ 1 trillion in recent weeks.
In the last year, more than $ 200 billion has been spent globally to buy Bitcoin, more than half of the total money thrown to the cryptocurrency. In mid-April, Bitcoin traded at nearly $ 65,000.
Ben Emons, managing director of Medley Global Advisors, says the possibility of a drop below the $ 20,000 threshold cannot be “ruled out.”
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