There are a number of factors that could explain the current state of the cryptocurrency market. The first and most prominent reason is the regulatory concerns and legal implications surrounding the cryptocurrency market. On the one hand, there are those who call for stricter policies on digital currencies. Citing instances of fraud and laundering as justification for more stringent legislation. On the other, others believe that regulation will impede the growth of legitimate startups in an emerging industry, who rely on a hands-off approach to innovation. On March 26th, March 27th, and March 28th, there were a series of tweets from U.S. President Donald Trump that displayed a more negative sentiment towards cryptocurrencies.
Many are wondering what is happening with the cryptocurrency market. It seems that the market is on the decline. The market has gone from over $800 billion to under $100 billion in less than a year. The declining market is in part due to China’s crackdown on cryptocurrency digital yuan and in part due to the difficulty in scaling solutions in the space.
The cryptocurrency market is falling because there is a lot of uncertainty in the market. With so many coins and tokens on the market, it can be really hard to get a good feel for which coins and tokens will be the most financially successful.
Bad News Hurts Adoption Rate
No matter how hard they try to keep it hidden, bad news always gets out. And when it comes to Bitcoin, it’s that insecurity that seems most to worry people. On one hand, bitcoin has managed to fly, but most people are still reluctant to international flights. On the other hand, they’re very wary of bitcoin’s prices dropping, which are what could most hurt adoption but are also the most likely outcome. The only way to stop inflation would be to create more bitcoins cryptocurrency.
Bitcoin’s Perceived Value Sways
Bitcoin’s perceived value most likely has an effect on the adoption rates. Bitcoin is categorized as “high-risk, high-reward.” There are risks associated with it because the future value of Bitcoin is unknown. That uncertainty has an adverse effect on Bitcoin’s adoption rate.
Uncertainty of Future Bitcoin’s Value
Bitcoin is a digital currency that is stored and exchanged via wallets. It can be used to purchase goods both online and in stores. Bitcoin is not currently legal tender in any country and credit cards and bank transfers usually carry higher transaction fees for international transactions than what Bitcoin would cost. Add to this the uncertainty of Bitcoin’s long-term value and high volatility, and it’s easy to see why many companies shy away from accepting Bitcoin cryptocurrency.
High-Inflation Nations and Bitcoins
Bitcoin’s use case as a currency for developing countries that are currently experiencing high inflation is valuable when considering the volatility of Bitcoin in these economies versus the volatility of Bitcoin in USD. Bitcoin is much more volatile versus USD than the high-inflation Argentine peso versus the USD. To know more about digital currency, contact Yuan Pay Group.