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“Nationals October 2019

Why is Bitcoin Dropping?

| August 12, 2021, 08:00 AM

The tremendous momentum in Bitcoin (BTC-USD), which drove the price from $10,000 to more than $60,000, has reversed, with Bitcoin returning about half. Bitcoin traded for reference in the $10,000s last summer and autumn before the soaring. Some reasons that then reduced the price include the increasing retail and institutional acceptance of Bitcoin and retail investors. Adoption continues to grow but is offset by the insecurity that led Bitcoin to drop in prices. As I write, Bitcoin appears to be back on track. However, there are several reasons why the Bitcoin Rally fizzled after reaching its all-time high. For more information, visit crypto loophole.

Attack against Bitcoin

The Communist Party of China has begun a new attack against Bitcoin, detaining more than 1,100 individuals. Like many things in China, the narrative is on two sides: the government claims the organizations were engaged in criminal behavior, while others in the crypto-group say the primary purpose of the repression is to seize private wealth. China’s repression contrasts with Bitcoin’s growing popularity in Latin America, with El Salvador declaring Bitcoin the nation alongside the US dollar a statutory currency.

The Arc of Central Maryland

Environmentally Harmful

There has recently been a lot of debate over whether Bitcoin is environmentally harmful. Cryptocurrencies investment and ESG investment are both desired for institutions, and until recently, the tension between the two was not known to most. Bitcoin consumes a ton of energy, most of which has until recently been produced by coal-fired facilities in China. China is attacking people from Bitcoin mining–the assumption is that they may utilize their enormous hydropower barrages to centralize Bitcoin mining. Bitcoin consumes a lot of energy in its present form, but recall that in the 1990s, Bitcoin is a progression in terms of labor.

Ethereum (ETH-USD) has stated that it is shifting from a “proof of work” methodology to a considerably more energy-efficient “proof of stake” one. The Bitcoin development community is likewise likely to enhance Bitcoin, reducing energy use from a huge to an insignificant amount. For an example of a potential enhancement, see the Lightning Network. Gold mining also consumes plenty of energy, as do S&P 500 companies such as Tesla (TSLA), but critics are now focused on Bitcoin. The arguments of ESG against investment appear to me slightly double-dimensional, but the three-dimensional image is much more difficult.

Elon Musk Tweet

Elon Musk recently tweeted critically about Bitcoin. This catalyst has turned back as Musk helps Bitcoin to rise. Musk has millions of followers on Twitter – he can compose haiku and postal documents and analyze his viewpoint in 25 different major media sources. Elon tweeted lately about Bitcoin, Dogecoin, or C*rocket (his new favorite cryptocurrency). Musk also stated that he would no longer accept Bitcoin as a Tesla payment. Similarly, during this week’s Miami Bitcoin Conference, a TikToker yelled “Dogecoin to the moon” before it could be done by security. Depending on whatever side of the bed he wakes up next, Musk may either assist or damage Bitcoin’s price.

Calls Margin

There are other individuals out there who want to increase the volatility of Bitcoin further, so they borrow from their Bitcoin to purchase even more. The apparent issue is that the loan collateral is Bitcoin, the most volatile asset. When the price drops, the lenders call the loans and sell them, which reduces the price, forcing additional liquidations. This forced sale produces price collapses, and usually, speculators lose their whole cash.

Is Bitcoin going Back up, or is it going to Crash again?

Crypto usage will continue to grow in the next years, and Bitcoin will gain prices. However, bitcoin investors should be prepared for 50 percent declines, but the price decrease may be much greater than the present price. Overall, the retreat in Bitcoin makes sense given the world’s uncertainties, but the chance that Bitcoin is outlawed or zero is minimal. For personal reasons, I took some gains in Bitcoin in $40,000s, but Bitcoin is one of my biggest assets. There is a danger of Bitcoin not being the cryptographic of the future, but I believe that either Bitcoin, Ethereum, or both remain major cryptos and may alter their code to innovate.

Here’s a lesson to learn from my mistakes and not make the same errors. I’ve just acquired a new phone and naturally exchanged my old phone for 100 dollars or whatever it offered me. I did not know that my 2-factor authentication was linked to my older phone. Therefore I couldn’t access my account when I logged on to my BlockFi account after a few glasses of wine. I tried the Google Authenticator with my new phone and my Google account, but Google gave me an error notice when I did that. When I established my account, I had to utilize the recovery key they provided me. I’m in. No big thing, right? No big issue. Before I log in, another recovery key emerges, which I don’t know if it’s the same or not. I’m taking a photo of it to be safe.

The next time I log in, I know the previous recovery key did not work, and it might have been the only thing that spared me from losing all of my cryptography. Afterward, I removed all my cryptograph from BlockFi and placed it in the exchange-traded Grayscale Trust (OTC: GBTC) at a NAV discount to avoid becoming a statistic.

For those who have comfortable stomach volatility, I believe that the upside still outweighs the negative of Bitcoin significantly. Bitcoin has gone crazy previously and will probably do so in the future. I am a big believer in cryptocurrency’s long-term potential, and behind it is my money. The progress of Bitcoin isn’t and won’t be linear, but if you’re ready for this trip, wonderful things have occurred and should continue. Bitcoin probably generated more millennial millions in the past than anybody else’s innovation, and if you want to develop significant wealth in the long run, it is essential to see the forest through the trees.

Liquified Creative Annapolis

Category: Local News, NEWS

About the Author - Stephanie Maris

Stefanie is a local blogger and social media content marketer from Maryland and most recently a wife and a mother. She has an unhealthy obsession with puns, sarcasm and caffeinated beverages.

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