The dip affecting all major coins in the cryptocurrency market earlier this week (July 20) saw Bitcoin prices fall dramatically for the second time in a month as Covid-19 fears gripped markets worldwide and worsened the impact of a global crackdown on crypto.
The world’s largest cryptocurrency fell below the $30,000 threshold that investors and market warned could warned could open the door to new lows in the cryptocurrency’s value, as Bitcoin struggled to return to its former soaring values of up to $64,000 in value
Tuesday saw Bitcoin topple by at least 5% on the previous 24 hours that day, with the fall coming after warnings that continuing global crackdowns on cryptocurrency mining operations and trading worldwide could be continuing to plague the market with greater levels of instability.
Fears that Bitcoin is in a bear market seem to have been soothed by the latest rebound, however, thanks to being buoyed by The B Word earlier this week, the launch of a new pro-Bitcoin organisation promoting institutional acceptance of the coin.
Tesla tech guru Elon Musk appeared alongside Twitter and Square founder Jack Dorsey to discuss his own holdings of Bitcoin, Dogecoin and Ethereum as well as the major coin’s future prospects for Tesla payments after suspending these following environmental concerns in May.
The B Word: What did Elon Musk say about Bitcoin payments to Tesla to make Bitco…
Here’s the latest crypto news and prices for Bitcoin, Ethereum, Dogecoin, why they are worth after the tumble and what crypto mining or trading means.
What is Bitcoin worth today?
As of 7.30am on Friday July 23, Bitcoin’s price was fluctuating around $32,622.04 or £23,711.49 – having reached a new low for July of $29,368 at just before 11am on Tuesday July 20 according to CoinDesk.
Bitcoin’s initial shock fall occurred last month on Tuesday June 22 when, after hovering around the $30,000 threshold, the coin’s value plummeted to a new recent low of $28,814.75 that afternoon.
Since then, the currency has rebounded and managed to trend upwards again, but its price has remained stuck in the low to mid $30,000s.
The recent plunge saw its highest value so far this year of $64,000 in May almost sliced in half, with pundits warning in late June that the dip to under $30,000 could lead to a sharp rise in sell-offs and more people refusing to ‘hodl’ their positions.
Ethereum prices were also up today – with the coin typically moving in tandem with Bitcoin recovering from its dip of over 6% in price on Tuesday (July 20) to a much more positive $2,081.57 as of 7.30pm on Friday morning.
A popular cryptocurrency synonymous with the rising crypto trend of NFTs, Ethereum has an all time high of $4,382.73 which it reached in May’s cryptocurrency boom but has struggled to return to this peak since.
The hype surrounding popular memecoin, Dogecoin, had until recently continued to show dwindling values, but after Musk lauded the coin’s community and less serious status as an altcoin at the major Bitcoin conference on Wednesday July 21 it soared to over $0.20000.
Dogecoin’s price today is currently sitting at around $0.196059, or £0.142461, while Cardano prices fluctuate around $1.20, XRP Ripple at $0.601200 and Stellar at $0.269238 as of 7.45am today.
Why were crypto prices down?
Recent falls have come amid a growing crackdown on cryptocurrencies in China, where authorities in the southwest province of Sichuan ordered Bitcoin mining projects to close last month.
The State Council, China’s cabinet, recently vowed to clamp down on mining and trading as part of a series of measures to control financial risks.
While data on mining is scarce, production of Bitcoin in China accounted last year for about 65% of global production, according to data from the University of Cambridge.
Sichuan is its second biggest producer.
“(The) crackdown on Chinese miners might mean that they are offloading coin into a thin market and taking us lower,” said Ben Sebley of London-based crypto firm BCB Group.
China’s central bank said it had summoned some banks and payment institutions recently, urging them to crack down harder on cryptocurrency trading.
Companies that mine Bitcoin – an energy-intensive process – typically hold large inventories of the cryptocurrency, with any moves to sell large amounts depressing prices.
The cryptocurrency crash in late June also led to a similar fluctuation in the price and availability of Graphic Processing Units (GPUs) as reports of the dumping of these much-needed components for mining rigs in China amid the crackdown sent prices skyrocketing worldwide.
Following the move, countries like South Korea also pledged to tackle the rise in money laundering taking place via cryptocurrency, while the Metropolitan Police announced that it had successfully closed in on a huge UK cryptocurrency money-laundering operation.
On July 13, the Met declared that special investigators had made the UK’s largest cryptocurrency seizure yet, and one of the world’s largest seizures, seizing a whopping £180m worth of cryptocurrency.
In turn, cryptocurrency exchange platforms such as Binance have been feeling the heat across the world as regulators and governments have started to pay close attention to the operations of such platforms in the wake of the global crackdown on crypto.
What is crypto mining and trading?
Cryptocurrency mining describes the process whereby Bitcoin, or similar coins like Ethereum or Dogecoin, are given to users as a reward for solving computational puzzles to verify and validate ‘blocks’ of transactions.
These are then added to a blockchain, helping to increase its value through clean, valid transactions, with miners rewarded for doing so with cryptocurrency.
As a decentralised network and form of currency, the lack of banks and infrastructure to authenticate transactions and exchanges means that mining is essential to the functioning and value of any cryptocurrency.
So clampdowns by state authorities on the activity – especially in countries where lots of mining takes place – will cause drops in the price and value of Bitcoin.
Trading, which typically takes place through digital wallets offered by companies like CoinBase, Binance, OKCoin and more, allows buyers and sellers to trade Bitcoins or other coins using traditional ‘fiat’ currency or cryptocurrencies.
Many Bitcoin traders will also take up speculative positions on the future profits or movements of Bitcoin through derivatives such as a Contract for Difference (CFD), which is a financial contract seeing buyers pay sellers the difference in the prices of a cryptocurrency between its open and closing trade value at contract time.
Additional reporting by Reuters journalists Tom Wilson, Kevin Buckland and Julien Ponthus