Bitcoin’s Pullback: A week of turbulence

Crypto news this week

The awareness of cryptocurrencies has not soared like this since its inception. Despite the great number of adoptions and integration by corporations, the decline in digital assets in recent weeks has caused some investors, traders and newcomers to hold negative views about the crypto space.

A few basics first. bitcoin and other digital assets are digital currency that is not tied to a bank or government and which allows users to spend money anonymously. Miners are those who create coins by lending computing power to verify other users’ transactions. In exchange, they receive bitcoin or other digital assets.

According to Blockchain.info, bitcoin has gained more popularity, and more than 300,000 transactions typically occur on an average day. Even with this popularity, cash and credit cards have great potential and volume compared to bitcoin.

Early February, Elon Musk announced that Tesla had invested $1.5 billion in bitcoin. In March, Tesla began accepting bitcoin as a medium of payment for its products. The purchase and integration of bitcoin as a medium of payment contributed to the massive run-up in bitcoin’s price.

The Crypto space has been experiencing a major pullback in bitcoin and other digital assets because of negative news especially from Tesla CEO Elon Musk and new regulations coming from the Chinese government.

Tesla’s decision to stop accepting digital currency as payment for its products was a result of the potential environmental damage that can result from bitcoin mining. Also, tighter regulation of digital assets led to a massive decline in the price of digital assets.

Bitcoin enthusiasts pushed back on Musk’s reasoning and fellow billionaire Mark Cuban said, gold mining is much more damaging to the environment than the mining of bitcoin.

The China Banking Association on Wednesday warned member banks of risks associated with digital currencies. This report affects bitcoin and other digital currencies and they suffered sharp declines as well.

The statement posted on the Chinese Banking Association’s website said: “financial institutions should resolutely refrain from providing services using digital currencies because of their volatility.”

According to Grundfest, cryptocurrency proponents see limitless potentials, while critics see nothing but risk. Technology has the capacity to disrupt system(s) and bring in a new way of doing things. Faith has been restored and the emergence of more people using technology makes the future of cryptocurrency look better. The Covid-19 was an eye-opener to the great possibility of doing things differently while the breeze of transformation was felt on banking, technology, and communication. The integration of bitcoin and other digital currency as payment options makes the future of digital assets interesting.

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