The issue of volatility has marred the reputation of the crypto world since the beginning. Price jumps and falls are seen very often. Just recently, after staying in the $6,000 range for quite some time, bitcoin finally dropped below the mark of $6,000. At the time of writing, it is priced at around $5,501 dropping by almost 12.80% in the past 24 hours, as per CoinMarketCap. But what might be the reason behind this drop? In order to get an idea regarding this plunge, BlockPublisher got in touch with Jason A. Williams, the founder of Morgan Creek Digital.
Answering the question regarding the reason behind this major price plunge, Jason stated:
Not sure. Could be the bitcoin cash hard fork today.
Further adding on to his statements, Jason also pointed out:
Could be whales artificially suppressing the marketing and trading. No one really knows.
The uncertainty that is associated with the market of cryptos is very high. No one really knows what causes these major price shifts in the prices of the crypto assets. As suggested by Jason, this drop could be the result of the bitcoin cash hard fork or it might be the big whales of the crypto world which might be manipulating the market. One does not know for sure.
Manipulation is also one of the prominent issues associated with the nascent world of cryptos. It is one of the major issues due to which the United States Securities and Exchange Commission (SEC) has not yet approved a crypto-linked exchange-traded fund (ETF). The trust among the general public regarding cryptos is also on the relatively lower side owing to this issue. This recent plunge might just be the result of the big whales using the market in their own favor.
Until this recent drop, bitcoin was showing signs of much-improved volatility for quite some time. More and more trust in the asset was being developed due to the stability shown by the asset. As of now, cryptos are largely used by people to gain profit in fiat, instead of using them as actual currencies. Improved volatility can shift the tide in favor of the asset as more and more people will start using bitcoin as an actual way of buying and selling things. If this asset is to grow and progress, people need to be provided with more opportunities to use it as a currency.
As we move forward, with a bitcoin ETF in probable sight in the next few years, it will be interesting to see how things turn out for this global asset.