Singapore – Bitcoin and other virtual currencies plunged on Thursday, November 26. It stoked speculation about the durability of the crypto boom. According to the reports, Bitcoin slumped at 8.7 percent while other digital coins like Ether tumbled.
According to Luno Singapore Business Development Head, the conditions are bound for correction and massively overbought.
However, despite the global pandemic and retreat, Bitcoin has doubled its price this year. Recently, the crypto asset is knocking at the record-high of US$1.511 sets. Crypto enthusiasts tout purchases by retail investors, billionaires, and institutions.
According to critics, Bitcoin and other digital assets have fallen as much as 27%. The fear over the tighter and stricter crypto regulation and profit-taking are among the reasons cited for the sudden drop.
Coinbase Chief Executive Officer Brian Armstrong discussed the speculation that the United States consider new rules that can undermine digital transactions’ anonymity. Antoni Trenchev, the managing partner of Nexo London, also said that the Trump administration clamping down on crypto might also trigger the drop. Other digital currencies, such as XRP, tumbled as much as 27%.
Many critics and crypto enthusiasts argue the virtual currency’s famed volatility portends a repeat of what occurred three years ago. Some see signs of retail investors piling in to store up an inevitable reckoning or chase momentum for fast gains.
Crypto proponents say the current focus on cryptocurrencies this year is different from what happened three years ago because of the growing institutional interest. Just this week, a Bitcoin exchange-traded Van Eck Associate Corporation started supporting blockchain technology. Last October, PayPal started allowing customers to access cryptocurrencies. Currently, Ethereum, the most actively used blockchain worldwide, has rumours about a network upgrade that would allow similar transaction numbers as Mastercard and Visa Inc. At the time of writing, Ether’s total supply has quadrupled this year. Luno’s Ayyar is hoping that digital assets like Ether and Bitcoin will stabilize and achieve all-time highs. However, a larger drop will surely follow this success.