For many years, the development of the Internet has supported our daily duties. Without leaving home, we can arrange formal matters that, until recently, required a personal visit to the appropriate office. No wonder then that progress has also begun to affect such delicate matters as financial turnover. When several decades ago more and more people started to become convinced of payment cards, transfers to bank accounts and withdrawals from ATMs, it was hard to imagine a situation in which the next big step towards the development of money would be possible. And yet!
You must have come across the name "bitcoin", which in the subject of currency is precisely the symbol of this great step towards progress. In terms of supplementing information for those who may not have been interested in the previously discussed issue - bitcoin is a decentralized currency, free from the guardianship of governments and banking institutions. You can use it anywhere in the world, as long as you have internet access, of course. The amount of bitcoins is limited, which means that there is a certain amount of it on the market - they cannot be printed like ordinary money. And thanks to its uniqueness, bitcoin is slowly starting to compete with paper money. More and more online stores decide to accept payments in this currency.
If you are interested in exchanging currencies and earning on currency fluctuations, bitcoin can also be a way for you to multiply your fortune. However, you must remember that where you can earn, you can also lose.
Bitcoin was gaining fame almost month by month. Virtual currency was popular among mutual funds and - perhaps even above all - among individual clients. The popularity among the average "Smith" was related to the fact that bitcoin became a very fashionable product. What's more, numerous presentations of such people as Elon Musk only boosted the hot atmosphere and the interest around him. It is enough to mention the extermination of the owner of Tesla, who only mentioned the topic of cryptocurrencies, so that after a while they began to achieve record results in the stock exchange quotes.
This state of affairs - the possibility of quick earnings - started to fuel the economic situation and attract new customers. For many, the so-called "sheep rush" was active, which consisted in imitating other investors. In a situation where an investor with an average knowledge of the subject imitates another buyer, who is not very knowledgeable about cryptocurrencies, it may lead to making wrong investment decisions. Was this the case with bitcoin? Not immediately.
Those who invested their money in the right moment and knew when to sell their shares could really make a lot of money from such transactions. On the other hand, for those who have slept through the decline in bitcoin, there is no help for the time being. The highs on the charts - at least for now - are behind Bitcoin. You are probably wondering how it is possible that such a future-oriented currency, supported by people such as Elon Musk and popular all over the Internet, may experience a decline in the rate? There are several reasons for this. Therefore, it is good to know to know how to invest properly in the future.
Cryptocurrency Crash - Where Did It Come From?
One sentence, valuable advice or a good word from Elon Musk miraculously upped the bitcoin price, and on the second day caused it to drop dramatically. How did it come about? The producer of Tesla, a fan of ecology and a great supporter of caring for the environment, noticed that supporting bitcoin as a cryptocurrency does not have a positive effect on ecology, and thus he is temporarily not interested in the further development of this currency. The effect of these words is the aforementioned drastic decline in bitcoin. Those who realized that the price was already high started selling their shares. Investors who missed a good moment saw a loss in the form of a negative exchange rate.
However, Elon Musk himself is not able to influence the long-term fluctuations of the exchange rate that much. The decision of the Chinese government, which forbade payment institutions in their country to accept and provide services settled in bitcoin, was also very widely discussed. The Chinese market is currently the fastest growing market in the world. China is beginning to catch up, and according to many analysts: overtake the US in terms of economic development. Chinese companies dominate the export of their goods. Millions of material goods are produced and as many are sold. No wonder that the bitcoin crash was also caused by such a policy of the Chinese authorities. If an emerging currency is cut off from a market like China, can you be surprised by its decline? It seems not.
Bitcoin - The Crash That Could Not Be Avoided?
The advantage of bitcoins is that they are free from government or banking decisions. You can freely rotate them, buy and sell them. All you need is a good-quality telephone, Internet access and it's ready. You can become the owner and trader of this currency in one day. On the other hand, the decision of the Chinese government shows that it is possible to strongly influence and weaken the bitcoin rate through political influence. It is also worth recalling that in a similar tone - although not so bluntly - representatives of the governmental administrations of Turkey and India spoke about cryptocurrencies. What's more, after the decision of the Turkish government, the owner of the popular exchange where you could buy cryptocurrencies disappeared from this country. In addition to the disappearance, the owner of the stock exchange took with him more than $ 2 billion, which investors had placed on it. These types of situations show that you can lose a lot of money on one day due to frauds or decisions of individual countries. Unfortunately, many people who benefited from the unpredictability of bitcoin and made money on it also lost the same - it is not yet possible to predict which direction the rate will "go". So it's always worth diversifying your investments in cryptocurrencies.
Attention! The above article neither in whole nor in part constitutes a "recommendation" within the meaning of the provisions of the Act of July 29, 2005 on trading in financial instruments or the Regulation of the European Parliament and of the Council (EU) No. 596/2014 of April 16, 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6 / EC of the European Parliament and of the Council and Commission Directives 2003/124 / EC, 2003/125 / EC and 2004/72 / EC and Commission Delegated Regulations (EU) 2017/565 of 25 April 2016 supplementing Directive 2014/65 / EU of the European Parliament and of the Council as regards organizational requirements and operating conditions for investment firms and defined terms for the purposes of this directive. The content contained on the website does not meet the requirements for recommendations within the meaning of the above-mentioned act, incl. do not contain a specific valuation of any financial instrument, do not rely on any valuation method, and do not identify investment risk.