XRP price - The Recent Rise And Fall Of Cryptocurrencies

MyBTCZone, the price of Bitcoin on Tuesday plummeted further even as Tesla CEO Elon Musk and the United States Treasury Secretary Janet Yellen recently weighed in on the coin. Bitcoin, the world’s most actively traded and valuable cryptocurrency plunged by 11% within the space of 24 hours.

According to data from CoinMarketCap, Bitcoin dropped below $50,000 and traded around $48,000 on Tuesday at 11:20 a.m. ET. Surprisingly, the price of this digital currency had earlier fallen to as much as 16% to close at $45,041.

Smaller cryptocurrencies like Ripple (XRP) and ether also witnessed a price drop. For instance,XRP traded around 47 cents after it dropped by 17%. Similarly, the price of ether declined by 11% to close at $1,573.

The US Treasury Secretary Janet Yellen had on Monday described Bitcoin to be an “extremely inefficient way of conducting transactions.” She cautioned members of the public to be wary about the use of Bitcoin for illicit activity. She went further to raise an alarm about the impact Bitcoin could have on the environment. Bitcoin’s recent price surge in January, has no doubt, reminded critics of the amount of electricity required to mine new coins.

Central authorities do not have any influence on cryptocurrencies. Cryptocurrency miners operate in their chosen location running high-power machines with a view to solving complex mathematics problems so that all transactions can pull through. According to an online tool, the electricity requirement to produce new Bitcoins is much more than what Pakistan consumes. This online tool was developed by researchers from the prestigious Cambridge University.

Despite the recent bull and bear markets, the value of Bitcoin still hovers around 360% according to data collected in the last 12 months. In fact, the value is around 60% since the beginning of 2021. In the crypto market, a 10% price swing is not a rarity. In 2017, the price of Bitcoin climbed to around $20,000 before dropping 80% of its value the following year.

For the first time last week, according to Fintech Zoom the market value of Bitcoin surpassed $1 trillion. As of today, the market value has sunk below $900 billion. It got a boost from large companies like MasterCard and Tesla, as well as positive news from Wall Street banks. Tesla CEO Elon Musk, over the weekend, said Bitcoin and ether prices are a bit too high. Musk’s assertions came after his company bought over $1.5 billion of Bitcoin. On Monday, the company’s shares suffered a historic fall since September 23.

A UK-based trader, Glen Goodman, said that so many futures traders borrowed heavily to invest in Bitcoin contracts. “These borrowers caused the borrowing rate to surge. As of February 20th, new borrowers were charged around 144% per annum to access the service. Clearly, this could not have been sustainable; as such, cryptocurrency prices have to fall so that borrowing rate can return to normal levels, Goodman added.

Due to the perception that Bitcoin can store value like gold, it has gained traction among heavyweight mainstream investors. In fact, some bullish investors and traders claim that Bitcoin or any other cryptocurrencies can serve as a hedge against inflation.

However, critics have warned that Bitcoin doesn’t have any intrinsic value and that in recent history it is one of the biggest market bubbles.

Written By Team: MyBTCZone

Contact: https://www.MyBtcZone.com

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