Although wild value swings are the norm with cryptocurrencies, the last several days have been more volatile than usual due to a series of steps taken by governments across the globe. Bitcoin and altcoin prices, after a slow decline over the past few weeks, have moved wildly based on rumors and speculation that crypto may be banned or restricted by the world’s most influential nations. Other concerns regarding exchange security, and other technical disruptions, have also caused values to fluctuate.
Last week fears emerged that nations at the G20 meeting, scheduled for March 19th, would collectively agree to crack down on cryptocurrency adoption and use. These fears caused a significant drop in crypto values shortly before the weekend. Bitcoin fell below $7,500, a new low for the year, and many alts also saw steep declines. The meeting ended, however, with little action taken other than a vague statement calling for collective regulation by this July. Thus, prices rebounded quickly, with Bitcoin breaking $9,000 on March 21st.
A second wave of concern hit on March 22nd when Japan’s Financial Services Agency announced that Binance, the world’s largest exchange, was not in compliance with its registration requirements. Although such a statement would typically be insignificant, Binance has suffered from a wave of negative incidents recently, including an attempted hack earlier this month that briefly disrupted trading. Bitcoin prices declined after the news, falling briefly below $8,400, although a recovery appears to be underway.
It is worth noting that despite the concerns over the past few days, most cryptos have experienced an uptick in value. Many altcoins have also begun to gain against Bitcoin since the beginning of the week. It is still to early to determine, however, if this trend will continue.
The quick recovery from G20 concerns and other legal fears serves to demonstrate how state actions are having a decreasing degree of influence on crypto values. A time existed when anti-crypto moves by major nations, or even rumors thereof, could send the market into steep, long-lasting declines. Now, markets shake off such moves in days, if not hours. Any number of factors could explain such a change, but it is certainly reasonable to assume that more investors have come to understand that cryptocurrency is a permanent asset that cannot effectively be banned. Steep price drops are thus seen as a buying opportunity rather than a cause for alarm.
As always, more volatility in the crypto space is likely to continue, but overall crypto investment and blockchain development will move forward. As prices advance in the wake of the G20 meeting, it is increasingly clear that the crypto market is emerging as the decentralized economic entity it was designed to be. Although state players are influential, they are not the entities that are shaping the movement.
Feature Image via BigStock.
Source: Read Full Article