Bitcoin prices have been falling for the last few months and it has made traders very uneasy.
Throughout the years bitcoin prices went up and down but it mostly managed to stay up. Ever since the pandemic started the world of Cryptocurrency has been at risk. Bitcoin is no different. In the last few months, the world has been going through a lot. Many countries are dealing with the pandemic, homelessness, high unemployment rate, etc. Restaurants, shops, schools are closed. Businesses are trying to stay afloat. Traders are having a hard time trading. Some of the reasons for Bitcoin prices falling are given below.
Why are Bitcoin Prices Falling?
1. Worldwide Unemployment
To invest in Bitcoin people need extra cash. The world economy has taken a hit because of the pandemic. A lot of people has lost their job. A lot of companies have shut down. The unemployment rate has reached an unprecedented level. People are desperate for money. During a time like this people don’t want to do anything high risk. A lot of people are selling their stocks, even at a lower price. Times are desperate and people have to eat. Nowadays nobody has time for macro bitcoin trading. In the US, in the final week of August, 881,000 people claimed to be jobless. In such uncertain times, people don’t want to invest in Cryptocurrency. People feel safe having cash. As long as the economy doesn’t get fixed and the unemployment rate doesn’t drop Bitcoin prices will keep falling.
2. Investors are Worried
Investors are worried about global economic fallout. The pandemic is still not over. Before it is gone a lot more people are going to lose their jobs. Businesses are going under every day. In a time like this people don’t want to lose even more money. That is why investors are hesitating to invest in Cryptocurrency. In the past, Bitcoin had proved to be one of the safest Cryptocurrency. But now Bitcoin is behaving more like a risk asset. On the other hand, during the sensitive time such as this, hackers or malicious entities sometimes steal Cryptocurrency. That is why investors are even more nervous than before. It’s going to take some time before traders start to have faith in Bitcoin again. It’s going to take even more time for the world economy to fix and Bitcoin prices to go up. Until this happens there is nothing for trades to do but wait it out.
3. Stock Market Sell-off
When it comes to trading US stock market determines a lot of things. Traders worldwide keep an eye on the US stock market. But the stock market has been hit hard. The value of US dollars has gone down. People are not spending money on things because people do not have sufficient money. A lot of people have become homeless. Some observers have feared that all of this is going to create a negative impact in the Cryptocurrency market and they were right. People started to frantically sell off their shares and Bitcoin prices kept dropping. The more prices kept dropping the more people became paranoid and started selling more shares. Currently, Bitcoin prices are at an all-time low. If things keep on going like this people are going to lose faith in Bitcoin and traders won’t have any incentive to buy new shares. Something must be done before it is too late.
Rumours are bad for any type of business but they are especially destructive for a trading business especially during a pandemic. Currently one of the main problems with Cryptocurrency trading is rumors. A lot of people have lost money because of the falling prices of Bitcoin. That is why everyone is cautious. But the problem is nobody knows what to do. Rumors are flying everywhere. People are selling their shares because of rumors but that is hurting the price of bitcoin even more. If this keeps up the damage done to Bitcoin might be irreversible. So, to stop further damage management must take some necessary steps. Transparency is the key. Being transparent with traders will earn their trust. If somehow the frantic selling of shares can be stopped there might still be a chance for Bitcoin.
We are financially going through some tough times. The economic condition of most countries is terrible. But people need food to eat and they need a way to earn money. Bitcoin has always provided a way to earn money, a way to prosper oneself. That is why during this crisis we need Bitcoin more than ever. To stop Bitcoin prices from falling traders will have to stop selling shares and start investing in them. This is not an easy thing to do. Money is scarce now. But every successful person will tell you that some risks are worth it. So, let us do everything we can to make sure the prices of Bitcoin rises.