On June 13, decentralised digital currency Bitcoin’s value dropped to an 18-month low below $25,000, from $64,000 in 2021. As a result, several investors were left exposed to rather volatile market conditions. While Bitcoin’s value ranged around $23,000, ethereum dropped under $1,200. “Volatility in the cryptocurrency market is common. We are just seeing it to be high nowadays. This does not appear to be a bearish market. It may take more than a few months before we know what the present crash means in the long term,” Sathvik Vishwanath, co-founder, Unocoin, a cryptocurrency exchange, told FE Digital Currency.
Industry experts are of the opinion that inflation rate has been a concern for cryptocurrency investors. According to Rajagopal Menon, vice-president, WazirX, a cryptocurrency exchange, hike in interest rates across cryptocurrency oriented nations has resulted in the lessening of liquidity across markets.
Moreover, as stated in market reports, Bitcoin which was considered to be a dependable investment some years ago, has started to plummet in terms of value. As a result, the dependability of other cryptocurrency such as Ether are being questioned. “It cannot be denied that the technology backing cryptocurrency coins and its manifestations have not been challenged in any way. Cryptocurrencies have always been volatile,” Ramkumar Subramaniam, co-founder and CEO, GuardianLink, a decentralised platform, said.
Interestingly, it is being predicted that Bitcoin’s value may hit as low as $14,000 this year. The Indian market is not unaffected and trading volume in exchanges has dropped off in recent times because of the new tax laws and the falling crypto prices, Amanjot Malhotra, country head – India, Bitay, a cryptocurrency exchange, said. “Due to the current scenario, cryptocurrency companies have stopped hiring new employees and the focus is now on optimising cost,” he added.