Recent events have seemingly triggered a market crash, leading to questions about whether the landscape is entering a bear market.
Over the last 14 days, Bitcoin has dropped 29.8% and Ethereum has dropped 20.3% according to CoinGecko. At the time of writing this article, the market has bounced back a bit, up 7.96% according to CoinMarketCap.
Why has the market tanked? Fear, Uncertainty and Doubt, famously known as the acronym FUD, has played a significant role in the dip. Three major events played a tremendous role in shaking the crypto market lower, giving rise to FUD in traders.
The first major event was Elon Musk tweeting that Tesla will suspend Bitcoin payment.
Musk cites that the negative environmental effects of Bitcoin mining is why he is distancing himself from the coin. Yet he also was quoted saying the following:
“Cryptocurrency is a good idea on many levels and we believe it has a promising future…. Tesla will not be selling any of its Bitcoin and we intend to use it for transactions as soon as mining transitions to a more sustainable energy.”
Although many people are quick to assign all the blame to Musk, headlines across news platforms looked like “Tesla Suspends Bitcoin” without emphasizing he’s holding onto the coin and believes in the future of crypto.
The widespread news prompted an immediate dip in the market, showing the first signs of FUD in traders. Fear was then amplified when crypto sites began collapsing under the pressure of investors buying and selling. Coinbase went dark and could not be used while CoinGecko and CoinMarketCap suffered sporadic outages.
Unfortunately for Ethereum investors who only saw the exit tunnel, all the transaction volume significantly raised the transaction prices. The cost of a typical Ethereum transaction now costs 700 gwei, according to Etherscan.
Then, just days ago, China reiterated their “ban” on crypto. It’s hard to imagine a more troubling worst-case scenario after hearing all the bad news surrounding crypto currencies. Yet oddly enough, crypto influencers on Twitter are for the most part optimistic about crypto’s future (including Elon Musk!) You may be scratching your head, but the story doesn’t end here.
A Growing Wave of Optimism
Let’s first start with the man who kicked the crypto market into some turbulence, meaning Musk. The Tesla founder, who came down hard on Bitcoin for not being friendly to the environment.
Many people are interpreting this tweet to mean that Tesla will not sell any of its Bitcoin. Although Musk had already noted Tesla wouldn’t sell, it doesn’t hurt to reiterate to reassure investors.
Other important crypto figures have come forward expressing their optimism in crypto as well. Changpeng Zhao, who is the CEO of one of the biggest crypto exchanges, Binance, told the world that holding was the best thing to do.
Blinded by the FUD
With all the optimism, can the crypto influencers see something we can’t? Brian Brooks thinks so. The current CEO of Binance.us and former CEO of Coinbase jumped on Bloomberg to explain.
His rationale for part of why Bitcoin is down is because people are misinterpreting the news of how the Chinese government is handling crypto. Brooks says that “It’s ok to be in the asset class (crypto)” and that the US government “wasn’t going to ban crypto. Nobody’s going to ban Bitcoin.”
Cathie Wood, CEO of investment management firm Ark Invest, who also in a Bloomberg interview noted that it’s a great time to buy Bitcoin: “It’s on sale.”
Although there is much speculation going on in the community, it is unclear if the bull run is “over.” However, a recent tweet by Zhao sums up the message crypto influencers are spreading right now quite nicely. Thanks Zhao.
Source : bsc.news
Founded in 2020, BSCNews is the leading media platform covering decentralized finance (DeFi) on the Binance Smart Chain (BSC). We cover a wide range of blockchain news revolving mainly around the DeFi sector of the crypto markets. BSCNews aims to inform, educate and share information with the global investment community through our website, social media, newsletters, podcasts, research, and live ask me anything (AMA). Our content reaches hundreds of thousands of global investors who are active in the BSC DeFi space.