4 Reasons That Lead Bitcoin To Plunge

As you probably learned, the price of Bitcoin is very volatile. We saw what happened last winter when it reached almost $20.000 and then it heavily dropped just a few weeks later. There are a few explanations why drastic changes like these occur. Here are some of the reasons why bitcoin drops in price.

1. First-time Investors

Although bitcoin is more than 10 years old, only recently did it become widely used and adopted. This led to many people without any knowledge and experience to overwhelm the market. Everybody was investing their money in bitcoin. Of course, when people invest the price increases, it’s simple supply and demand rules. Many of these people thought that making money with bitcoin is easy.
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Once they found out it’s not really what they expected, they started massively selling their coins.

2. Bitcoin Manipulation

A really small number of people hold enormous sums of this coin. This way they can influence the market. They can create conditions for people to buy and also to sell their coins when they find it necessary to. They cause ups and downs in the price of Bitcoin regularly.

3. Regulation

When you see in a media that some country is planning on banning or regulating cryptocurrency, it almost always affects the price rate. If you remember, last year when China shut down all the exchanges, the prices for the majority of cryptocurrencies went down. After that, we had India stating that their government doesn’t recognize cryptocurrencies as legal. There were a few others as well, that brought a significant price decline in almost every cryptocurrency.

4. Critical Times

During the holidays we can see how the price is doing well; it skyrockets than it sets still. After the holidays it’s a mess. Also, one major element that gave BTC a kick in the head last year was Visa ending partnerships with a cryptocurrency provider. This was a terrible kick in the head for bitcoin since these cards were able to convert cryptocurrencies to fiat money instantly.