Cryptocurrency, the hottest topic in the market at the moment. People are crazy behind them but on 19th May the market saw the biggest crash, More than $565 billion worth of crypto wiped out of the market.
- Key factors for the biggest crash in the Crypto market?
- What’s new this time and who is behind this?
- Impact on Global Market
- Why China Increased regulation?
- Is this dip is the right time to invest in cryptocurrency?
Key factors for the biggest crash in the Crypto market?
This happened because china banned all the financial institutions and payment companies from providing any service related to cryptocurrency.
Not only this they also warned investors for making speculations in crypto trading. This is not the first time China has taken such a step, back in the year 2017 china banned cryptocurrencies but the new rules this time expand the prohibition.
What’s new this time and who is behind this?
On 18th May 2021, three major financial associations stated that banks, online payment firms should not give any service related to the crypto which includes no registration, trading, clearing, or anything else. This was the same as 2017 but add to this,
People’s Bank of China (PBOC) made clear that financial institutions must not accept any kind of digital currency, they must also not use them for any means of payment and no conversions are allowed between any cryptocurrency and the yuan or any other foreign currencies. Banks and companies providing payment services are also asked to step down.
Why China Increased regulation?
Due to the global craze behind Bitcoin revived crypto trading in China.
Many experts are suggesting as China is a communist country which means they almost control all kinds of payments but it is not possible to track the transactions of cryptocurrency because it is made with
Blockchain technology. The other reason could be, The PBOC ( People’s Bank of China) stated that cryptocurrencies are a potential risk for their own currency that is yuan, there are also trying to popularize their own digital currency.
Impact on Global Market
After the new crackdown from the People’s bank of china, the impact was seen in the global market.
China is a big crypto market and after the implementation of the new rule it the digital tokens are no longer valid in china. Due to this coins like Bitcoin, Ethereum, Dogecoin, and all others fell and this is the second fall in a raw, the first came when Elon Musk tweeted that Tesla will no longer accept Bitcoin.
The new crackdown will impact individuals as they won’t be able to trade, miners, and many businesses that were dependent on crypto.
Is this dip is the right time to invest in cryptocurrency?
The dip is big so many people will be thinking is it the right time to buy cryptocurrency? The answer is yes the dip is huge and it can be very profitable if invested after doing some research. China was a huge market and now china is out of the whole cryptocurrency scene so there is going to be less money involved in the market but that does not mean that one can not invest, still, the major coins like Bitcoin and Ethereum are a good option for investment and can make you good profit.
It also depends upon the person, how much you are willing to invest, and for how long because seeing the current situation it is going to time for the next bull run.
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