According to analyses made by fiscal markets, the price of Bitcoin is the riskiest financial instrument at present. The traders and investors are baffled with the constant price fluctuations. The price has plunged down below 30% of its peak value.
The markets of cryptocurrency
The price, that was 20000 dollars in December, skyrocketed in January, before crashing down to 6000 dollars in February. With the start of March, the price began to rise slowly. But the rebound suffered again in this week owing to the concept of FUD.
Fear Uncertainty and Doubt
The market of crypto currency is highly susceptible to fear, doubts and uncertainty owing to the coin’s terribly unprecedented nature. With Binance shrouded with rumor that it might have been hacked, despite the repeated denial, the prince dip has worsened. It was declared by the government of the USA and the SEC that they are keeping a close watch on ICOs and other cryptourrency companies. With the largest platform being under the threat of hackers and the SEC’s regulatory declarations generated a lot of panic amongst investors.
The price flow of Bitcoin
BTC is considered as an indicator of the cryptocurrency market. On the 5th of March, the price of Bitcoin crossed 11600 dollars, before dipping to 8400 dollars in less than a few days. Thanks to the panic and FUD, he overall marketcap of cryptocurrency that had been nearing a trillion dollars, plunged by about 60%. This week, the impact on the market had been negative, leading to the shedding of billions of dollars in the previous week due to rumors and baseless speculation.
The SEC has reassured that it will no longer take part in the cryptocurrency space which is should boost the confidence of investors. Binance has prohibited the use of bots and software APIs while trading on the platform.
The overreaction of Bitcoin
Bitcoin’s tendency of overreaction resulted in its price drop by 30% thanks to the alarming newsflash about SEC and the Binance rumors. However rumors and newsflash alone is not justified enough for the price drop by a few billions of US Dollars.