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Bitcoin Slump Should Be Nothing To Worry About If History Repeats Itself

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Bitcoin Slump Should Be Nothing To Worry About If History Repeats Itself

Those who are in the know about cryptocurrency might have noticed that it has taken something of a nosedive recently.

However, if the past is anything to go by, this might not be the start of the 'crypto-crash' that everyone has been predicting, and things might bounce back to normal relatively soon.

On Wednesday, Bitcoin dipped sharply as part of a continuing downtrend that has been taking place for around 10 days.

That shouldn't present too much of a concern for those who are invested though, as it's documented just how volatile the crypto markets can be.

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Furthermore, wherever Bitcoin goes - as it's the largest cryptocurrency going - the rest tend to follow.

It's widely known that cryptocurrency is prone to periods of extreme fluctuation - that's par for the course. At the minute the experts claim that the slump is due to 'FUD', better known as Fear, Uncertainty and Doubt.

Bitcoin has been slumping for a while now, but it might be nothing to worry about. Credit: PA
Bitcoin has been slumping for a while now, but it might be nothing to worry about. Credit: PA

The reasons for that FUD encompass everything from the digital asset policy of China to the tweets of Elon Musk.

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China is currently rumoured to be cracking down on the use of digital assets such as cryptocurrency, and while that is nothing new to those who understand the crypto-world, it still creates uncertainty and hesitancy.

As for Elon, he's been responsible for some of the biggest swings in the crypto-universe recently, having created a massive buzz around Bitcoin and meme coin Dogecoin just by using his social media profile.

However, he recently announced that his car company Tesla will no longer accept payments for cars in Bitcoin until it becomes more environmentally friendly.

While it's concerning for those with skin in the game, it's not necessarily a reason to sell up and get out immediately.

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According to Dow Jones Market Data, there have been 750 instances of a price change of more than five percent, 230 instances of a swing of more than 10 percent, and almost 50 changes of more than 20 percent.

It does vary, basically.

Obviously, past results are no true indicator of what is to come in the future, but there's a decent argument to be made in stating that those invested in cryptocurrency needn't be too worried just yet.

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Paolo Ardoino, from cryptocurrency exchange Bitfinex, is one of those who isn't too bothered by the slump.

He believes that the market is somewhat more stable than it has been before.

Elon Musk has said Tesla will no longer accept payment in Bitcoin. Credit: PA
Elon Musk has said Tesla will no longer accept payment in Bitcoin. Credit: PA

Ardoino told The Independent: "As the financial application of the blockchain, Bitcoin has emerged as an immutable and battle-tested force.

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"Those drawing comfort from a sea of red today should remember that they come from a very different generation to the one that will use this technology in ways that will bring financial freedom to so many.

"Bitcoin's steel has been sharpened in the most adversarial conditions of the open public internet. Critics who celebrate what they perceive as a meltdown in crypto exhibit the very worst characteristics - coupled with schadenfreude - towards a technology that is elegant in its brilliance.

"Those who don't and refuse to get it will be proved wrong."

Vincent Chok, CEO of First Digital Trust, added: "I'm not really concerned about the long-term effects of this. More and more financial institutions are getting involved in this space which has already legitimised this industry.

"Financial institutions, hedge funds and high-wealth investors are looking at crypto beyond the investment benefits... A lot of revenue is being derived from crypto lending, asset lending, and this is just going to grow larger, despite the dips of this week."

Featured Image Credit: PA

Topics: Bitcoin, World News, Money, Cryptocurrency

Tom Wood
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