The price of Bitcoin, the most popular cryptocurrency in the world, has fallen below the crucial $30,000 threshold, igniting a fiery discussion among market participants. This current slump has a number of causes, all of which must be understood.
The present crypto market’s general lack of appetite for risk is the first important factor. Recent months have witnessed a substantial decline in the number of new investors joining the cryptocurrency market. This reduction might be ascribed to potential market players being cautious while they wait for clarification on how regulations will be applied to digital assets, notably in the United States.
A substantial part is also played by investor scepticism over the future of Bitcoin exchange-traded funds (ETFs). Although several applications have been submitted to the U.S. Securities and Exchange Commission (SEC), it is still unclear which ones will be authorised. This uncertainty has hindered institutional investment into Bitcoin, further depressing the value of the digital commodity.
Additionally, the excitement that the cryptocurrency market felt in June appears to be being hit by the reality check of falling inflows. The decentralised finance (DeFi) and non-fungible token (NFT) industries, which had earlier drawn a lot of investment and attention, have also seen a slowdown in activity. There may be a change in market mood because neither area is exhibiting substantial growth patterns in terms of total value locked (TVL) or inflows.
Positively, spot trade volume for Bitcoin has increased for the first time in three months. However, it is still at record lows, indicating that market players are waiting to see before investing more money in the industry.
