What this has to say about more minor popular currencies like Dogecoin, on the other hand, has been much more damaging, with the cryptocurrency plummeting by more than 50% in only two days. The basket of currencies, including Ether and Dogecoin, were the ones who bore the brunt of the deterrent force, but it was bitcoin that suffered the vast majority of the most significant losses. In only five weeks, the cryptocurrency went from a steady high of over 65,000 USD in mid-April to a low of 35,000 USD.

When it comes to fulfilling its function, it goes without saying that the cryptocurrency market has taken on the characteristics of a chameleon-like creature. For those who are not interested in the field, the excitement surrounding it can be attributed to some form of speculation, as it is almost always a trending topic on social media, which they come across without really understanding how much interest in the first place.

It is reinventing what the conventional payment system looks like, transforming previously established financial institutions into ones that are more in tune with the times while also being more inclusive of people from various socioeconomic backgrounds. Despite being subjected to tremendous pressure, the system has survived much worse during its decade-long existence. Many issues have arisen, and more criticism has its unconventional way of financing – yet it has persisted, particularly in the case of Bitcoin.

Following the incident on Wednesday, the bitcoin and cryptocurrency “fear and greed index,” which measures severe fear and extreme greed with a 0 value representing intense dread and a 100 value representing excessive greed, all dropped to an astonishing 11. The index considers market volatility, volume, social media mood, media trends, and other factors, all of which have pointed to more or less the same conclusion: concerned investors are on the rise. If you want to learn where to invest your money, do visit Blockchain.

What Is The Source Of This Noise?

Since their inherently long-lived nature, cryptocurrencies have enjoyed a sustained bullish rise over the last few months. With the assistance of retail investors actively promoting middle-grade cryptos’ success, many middle-grade cryptos have achieved their long-awaited all-time highs for the first time in history. The first fractures appeared when Elon Musk, the CEO of Tesla Inc. and SpaceX, issued a statement declaring that Bitcoin was no longer an accepted payment option for his businesses. His decision by environmentalists said that the alarming quantity of carbon dioxide and energy consumption associated with bitcoin mining exceeded the benefits of incorporating bitcoin into the financial models of the businesses engaged in the mining.

China has also announced a new regulation addressing digital assets to add gasoline to the flames, exacerbating the situation. As a result of this new regulation, all financial institutions in the nation, including banks and online payment channels, are prohibited from processing any cryptocurrency-related transactions for their customers. Overall, China does not want to be associated with the purchasing, selling, registration, and trading cryptocurrencies. Their latest policy statement said that they believe cryptocurrency does not have any intrinsic value since it is just a digital currency that exists on the internet and by any respectable financial institution or bank.

What Happens After That?

However, it is essential to remember that cryptocurrencies are still considered an experimental endeavor, despite their historical accomplishments over the last decade. The value proposition of the medium of value is what gives cryptocurrencies their unique character. They are in direct opposition to the conventional currency paradigm. Such losses may deter new entrants to the market or perhaps drive them towards the nascent digital fiat currency, which offers a guarantee of stability and a store of value in the form of a store of value.  

Conclusion

Because the future is still unclear and unpredictable, investors may want to avoid investing in high-risk assets to preserve their money intact. It doesn’t matter if cryptocurrencies, particularly Bitcoin, have historically delivered multi-bagger profits; there is nothing to prevent their value from swinging from zero to the hero or vice versa at any time.