Years after the dot-com bubble, yet another bubble has started following its path. But this time it’s the crypto bubble. 

Many of us have seen some of the memes floating around social media of how cryptocurrency is going down and people who invested in it are now whining and running away from it. So what just happened in the crypto market? But before that let me just give you a brief introduction to Cryptocurrency. 

A cryptocurrency is a digital or ‘virtual currency’ that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend. Many cryptocurrencies are decentralized networks based on blockchain technology—a distributed ledger enforced by a disparate network of computers. This makes it one of the most secured networks ever. There are over 2,500 cryptocurrencies, many of which use their own custom blockchain designed to their specifications. Some of the most popular ones are Bitcoin, Ethereum, Dogecoin, etc. 

So now since you know the ‘basics’ of what cryptocurrency actually is, let’s dive into our original question. Why is something so secure and so popular suddenly facing its downfall? According to some reports, on 16th May ‘21, the global cryptocurrency market had a market capitalization of around $2.2 trillion. On Sunday, after seven days, it stands at around $1 trillion. The market stands in red, with all major cryptocurrencies trading at levels lower than their earlier prices. Also, bitcoin, the most popular cryptocurrency in the world, is now down by more than 50 per cent from its record level of $65,000 as of April, which as a matter of fact, is huge! 

 

Musk’s series of pronouncements on cryptocurrency, usually through Twitter, have been influencing or triggering price fluctuations. On March 24, for instance, the Tesla chief

tweeted saying that one could purchase a Tesla with Bitcoin. This cheered up the crypto market giving it the assurance that an institutional giant like Tesla is backing the game. 

 

 

Later, on May 13, Musk reversed his earlier decision of Tesla selling vehicles in exchange for Bitcoins. This has now sent tremors in the crypto world leading to the sudden plummet in Bitcoin prices.

 

 

Calling out the unjustifiably high influence Musk has on crypto markets, a group of developers came together to launch $STOPELON, a counter-crypto community that aims to take over Tesla and stop Elon Musk from manipulating markets! 

Further dampening the global cryptocurrency market sentiment was China’s announcement of banning financial entities to engage in products and services related to cryptocurrency. Given that the country remains the hub of crypto mining and is the biggest contributor of cryptocurrency trades in the world, the prices went tumbling even more. However, many market experts viewed the fall as necessary and coming.As per Neeraj Khandelwal, CTO and Co-founder, Coin DCX, the restrictions placed by the Chinese government are merely precautionary in nature. “Bitcoin is a store of value and should be treated as an asset with a long-term forecast on gains. Price corrections are a part and parcel of every asset class and bitcoin is no stranger to the same.”

Analysts say that this was a necessary shake-up the market needed and now, only solid investors will remain, eliminating all novice investors looking to make some quick bucks off crypto trading.