Bitcoin Price Slips Below $6000, Few Reasons For the Meltdown
In the last one week, the world’s largest cryptocurrency has witnessed a severe meltdown with its price falling by more than 10% during the previous four days. Bitcoin has now broken another crucial resistance of $6000 and is currently trading at $5925, at the press time, according to the data on WorldCoinIndex.
The Bitcoin fall is also followed by an overall market correction with the overall valuations of the crypto-market going below $250. The major meltdown in the market is due to the Fear, Unrest and Doubt (FUD) after popular South Korean exchange Bithumb reported a loss of $30 million worth digital tokens falling prey to a cryptocurrency hack. Additionally, Japan’s regulatory watchdog - Financial Services Agency (FSA) - doubled down on its crackdown on crypto exchanges thereby further causing the market woes.
This time under the radar of the Japanese FSA was the country’s biggest crypto exchange bitFlyer which has been asked by the agency to suspend the creation of new accounts and improve its verification process to combat issues of money laundering and terror financing.
bitFlyer CEO Yuzo Kano apologized on this matter on Friday, June 22 saying: “We deeply apologize for causing concerns and inconvenience. We take this order seriously and will make all efforts to improve our operations.”
In an additional statement, the exchange said: “Our management and all employees are united in our understanding of how serious these issues are, as well as how serious we are in responding to them going forward. In order to maximize our efforts towards building a suitable service and improving on the issues identified, we have temporarily suspended account creation for new customers of our own volition.”
Some of the other exchanges which have been penalized by the FSA include QUOINE, Bitbank, BTCBOX, BITPoint Japan and Tech Bureau. Moreover, the heavy correction in the cryptocurrency market has also been due to some other major reasons like:
- BTC market has always fallen prey to heavy market manipulation by big whales trading their BTC tokens in big numbers and causing heavy fluctuations in its price. Finance professor from the University of Texas and multiple investigations carried out by the U.S Justice Department the Commodity Futures Trading Commission have provided enough evidence regarding the ‘conspiracy theory’ that actually exists in the market.
- Additionally, the shady relationship between the Tether and crypto exchange Bitfinex has been a topic of discussion since long where the USDT tokens are said to be used to by the exchange to inflate the price of BTC, artificially.
- Crypto experts from the industry now believe that over-inflation in the crypto prices during the Q4 2017 has caused new investors to lose faith in the market and believe that those prices could be achieved again. As a result, the supply of digital tokens has now outweighed the demand and is hanging like a dark cloud.
- Due to multiple instances of hacks and regulatory interference since the beginning of 2018, the crypto market has failed to achieve enough maturity and is still perceived to be in its nascent stage of development.
- There is a lot of FUD caused among retail investors which have spiraled the meltdown in the market. The constant correction in the market has caused investors to ignore the potential that the crypto industry has to offer in the long-run.