Elon Musk announces suspension of Bitcoin Tesla purchases
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It’s been a tough week for the world of cryptocurrency, demonstrated by the staggering drop in price for some of the big crypto names like bitcoin and Ethereum. Bitcoin plunged last week following Elon Musk’s announcement that Tesla will no longer accept the cryptocurrency for vehicle payments. Cryptocurrencies across the board suffered another blow this week, when China’s central bank announced a ban on financial institutions and payment companies from providing services related to cryptocurrency transactions.
Antony Portno, founder of Traders of Crypto, said of the state of the crypto market: “It would be easy to become distracted by the recent mini crash, but it must be said that nearly all coins are still multiple times more valuable than they were a year ago.
“Crypto is a new market, it is also unregulated and traded 24/7, the market is influenced by speculation, margin trading, shorting and manipulation by whales or groups of people working together. All of these aspects lead to a greater volatility in the market.
“Compared to the stock market, crypto has low liquidity so it takes less money to move the price, 10-20 percent daily movements are not out of the ordinary.
“Blockchain, which allows people to have power over banks, corporations and governments, is causing mass scepticism and hostility from countries and institutions, because it is giving people power they never once had.
“Whilst there are many meme coins and pointless copycat coins, there are some outstanding projects that will change the world and create a greener, more efficient and fairer society.
“With this in mind, I would expect to see cryptocurrencies make a strong return following this troubling mini-crash.
“However, there will be many people out there hoping that this mini-crash leads to a Wall Street-style of crash for cryptocurrencies… they might be disappointed.”
It’s not just the market leading cryptocurrencies which have struggled in recent days, with popular meme-parody coin Dogecoin also seeing a drop in value.
The currency saw a major drop on Wednesday following the news of China’s curb on the crypto market.
However, according to CoinDesk data, the price of Doge has recovered slightly over the last 24 hours, up 10.80 percent as of Thursday evening.
Dogecoin was priced at $0.422060, or £0.298647.
The cryptocurrency had a market cap of $54.67 billion (£38.69 billion).
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Is Dogecoin a good investment?
Like all cryptocurrencies, Dogecoin is incredibly volatile and people should be aware of the risks involved in investing.
The price of Dogecoin can go up and down in an instant, with one expert stating the cryptocurrency is “incredibly high risk”.
Adam Morris, co-founder of Crypto Head, told Express.co.uk: “Dogecoin is incredibly high risk, it’s one of those investments that could go well short-term but it’s long-term risk probably isn’t worth it.
“Doge has no real utility and has seen huge price increases off the back of celebrities and the gambling mentality of newer investors.
“It’s coins like this that are first to drop 95 percent in a market crash, which has already happened in the 2018 crash.
“If you’re investing in coins like this you need to be on the pulse and understand the level of risk you are taking on.
“At this point it seems that Dogecoin is likely a phase similar to GME, but we might not see a huge correction until the next major market correction.”
Instead of Dogecoin, Mr Morris suggested people looking for longer-term investment may be better off looking at other cryptocurrencies.
He added: “Long-term investors should be looking at things like Ethereum because they provide great infrastructure in the industry and actually deserve the value they have.
“Much of the infrastructure is actually built on Ethereum so it won’t be going anywhere any time soon.
“As we dive further into DeFi, NFTs and any other applications, Ethereum further cements itself in the industry. It’s still very early for Ethereum and the future applications are almost limitless.”
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