Why has the Crypto Market crashed? BTC, ETC and other cryptos see a major dip in prices

The crypto market suffered a major crash on Wednesday May 19, as China reinforced their ban on cryptocurrencies. The flash crash wiped out about a trillion dollars of net worth from the crypto markets, as per Coin Market Cap. Bitcoin, Ethereum and almost all cryptocurrencies saw a steep fall in their prices as China's newly reinforced ban triggered a wave of sell-offs from investors, which in turn triggered more panic sell-offs. Read on to know why has the crypto market crashed. 

Why has Crypto Market Crashed?

China's reinforced ban on cryptocurrencies was a major factor in the crash in the cypto market. However, there were also other factors influencing the crypto markets, and many experts believed a crypto market downturn was inevitable. Let's take a look at some events that happened prior to the major crash in the crypto world. 

Elon Musk's Tesla Banning Bitcoin 

Elon Musk announced a week ago that Tesla would stop accepting payments in Bitcoin. Then Musk went on to talk negatively about the environmental consequences of Bitcoin and how we was working with Dogecoin developers to scale up the transaction speeds on Dogecoin, as potential replacement for Bitcoin. This led to a fall in the price of Bitcoin overnight, and for a week Bitcoin kept falling. As of May 18, Bitcoin stood at an approximate price of $45,000. Many investors and experts in the crypto industry are unhappy with the influence a single Billionaire has on the crypto markets. Today, Elon Musk put out a Tweet saying Tesla has 'Diamond Hands' implying that Tesla is still holding onto the Bitcoin they purchased. 

Experts Believed the Market was in a Bubble 

Many crypto experts believed that the crypto markets had become oversaturated and were in a bubble, similar to the 1999 Dot Com bubble and 2008 housing bubble. Over the past few months, crypto prices shot up at an unexpectedly high pace, and even the less popular coins saw major growth. Many people on crypto forums believed this was a bubble and that a small crash was imminent. 

China Crypto Ban

As news about China's reinforced crypto ban surfaced, many investors pulled out their money from their cryptocurrencies, which caused a flash crash in the markets. A large number of people, after seeing the crash also sold their crypto coins, leading to an even more intense crash in the crypto markets. At one point, the price of Bitcoin dropped to $30,000, as per Coin Market Cap. Many people on crypto forums called it a crypto blood bath. As Bitcoin is the most prominent and influential crypto, a Bitcoin crash always reflects on the whole market, so the Bitcoin crash also crashed the prices of most Altcoins, including Ethereum. 

However, the crash lasted for a very short time, as a large number of people bought up Bitcoin and other cryptocurrencies at low prices. While the markets haven't yet fully recovered, Bitcoin has recovered nicely, sitting at a price of $40,183, at the time of writing this article. While this was a major crash, this is not uncommon for the crypto industry. Every few months/years these crashes happen, which ultimately stabilises the price of these coins, or as crypto experts call it - a 'correction'. 

DISCLAIMER: The information provided on this website is for educational and entertainment purposes. The information provided on this websites does not constitute investment advice, financial advice or trading advice. Republic World does not recommend purchasing any cryptocurrency. Crypto markets are highly volatile and crypto investments are risky. Readers should do their own research on cryptocurrencies and consult their financial adviser before making any crypto investments.

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