Why Is Bitcoin Fluctuating So Much In The Recent Days?
By Billy Lee on ALTCOIN MAGAZINE
One of the potential causes for the recent fall in Bitcoin maybe President Trump’s tweet on the 11th July, attacking cryptocurrencies all of a sudden. He stated Bitcoin and other cryptocurrencies weren’t real currencies and criticized their value. According to Trump’s tweet, he branded cryptocurrencies as “unregulated crypto assets” which were based on “thin air”, he also further stated that “Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity” (Trump, 2019). These are some negative statements that hurt the crypto market, especially when those statements are from the President of the United States. After President Trump tweeted, the crypto market recorded a slight fall of Bitcoin since Friday, trading at $10,028 USD and falling as low as $9,980. The impact of the fall of Bitcoin which was potentially a result of Trump’s tweet also caused other cryptocurrencies such as Ethereum and Litecoin to drop by 23% and 17% (Bloomberg, 2019)
On the other hand, the Crypto community gladly embraced the statements that Trump had on Bitcoin, as they took Trump’s tweet as official recognition of Bitcoin, crypto market and the blockchain technology (Forbes,2019). The chief executive of bitcoin and crypto exchange and payments group, Jeremy Allaire stated on twitter that “Possibly the largest bull signal ever” in reply to Trump’s tweet. He explains the fact that “Crypto now a presidential/global policy issue. People everywhere will embrace a mix of sovereign and non-sovereign digital currency.” This ultimately means that when crypto is moving slowly towards national politics, international stage and becoming a real and active subject that we discuss daily, people will start using this new technology alongside with cash. This will benefit the entire crypto market and industry (Forbes, 2019). Coinbase chief executive Brian Armstrong tweeted, “First they ignore you, then they laugh at you, then they fight you, then you win.” Hinting that the US government have to face and give recognition of the uprise of Crypto officially.
Despite the potential fall of Bitcoin from Trump’s tweet, the price rose slightly as investors and market watchers bet that Trump’s acknowledgment of bitcoin will force the public and the government to pay more attention to the market, and effectively pushes the prices up again (Forbes, 2019). Market watchers are expecting a positive boost from Trump to the crypto market in the future, as he and the government started treating crypto market the same as other markets by mentioning regulations and law enforcement, to prevent any illegal activities and drugs trading that were dealt with in the crypto market. This was supported by Mati Greenspan, senior market analyst at eToro stated that “Even though Donald says he’s not a fan of bitcoin, the fact that he’s mentioning it at all is hugely bullish for the entire crypto market.”
Trump’s attack on bitcoin could be also correlated to Facebook’s new blockchain digital currency called Libra and was planned to release in 2020. In contrast to Trump's negative view towards the crypto market, in the meeting on the American Senate Banking Committee on Facebook and Libra, the chairman of Federal Reserve Jerome Powell stated that he could foresee a future whereby multiple currencies could be used in the country, with Bitcoin being one of these.
The misprint of 5 billion USDT tokens could be another major cause of the recent volatile movement of Bitcoin and the crypto market. The Twitter account Whale alert was the first to falsely reported a total of 5 billion tokens, this huge number of tokens being released to the market caused many speculations and eventually caused BTC’s price to rise for 5% after receiving the fake news from tether (Cointelegraph, 2019). The mistake was quickly discovered by crypto trader Alex Kruger, and Justin Sun the founder of TRON clarified immediately that the actually minted tether was $50 million, not $5 billion (Cointelegraph, 2019). Tether’s CTO claimed that the new print as part of a swap from Omni to Tron, which there has been an issue with token decimals, and it resulted in a misprint. Paolo Ardoine CTO of Tether tweeted not long after stating the misprinted value has already been burn by showing prove of transaction records on twitter (Bitcoinist, 2019), however crypto traders and the public weren’t happy about their amateur mistake, printing whenever and how much they want without any checks and balances, regulatory oversight or compliance with existing laws, these reckless mistakes caused volatile movements in the crypto market and the valuable reputation of the crypto industry.
References
https://twitter.com/realdonaldtrump/status/1149472282584072192
https://cointelegraph.com/news/bitcoin-falls-under-10-400-as-major-altcoins-see-double-digit-losses
https://www.coindesk.com/below-10k-bitcoin-price-drops-1-4k-in-24-hours-to-hit-2-week-low
https://cryptonews.com/news/trump-takes-aim-at-bitcoin-but-crypto-community-says-thanks-4227.htm
https://bitcoinist.com/bitcoin-retreats-while-tether-printers-churn-out-more-usdt/
Billy Lee
Currently a student from Lancaster University and an intern from XP Invest.
XP Invest is a platform that enables traders to use their Bitcoin Holdings to trade exposure in traditional equities such as Nasdaq 100, Apple shares and many more!
If you’re active in the crypto space and are looking for new profit-making opportunities, or opportunities to hedge against the volatile price movements visit https://www.xpinvest.io/
15/07/2019
