«Red light» for crypto-currencies: why the bitcoin exchange rate has fallen to a minimum for producida link
Since the beginning of November the exchange rate of bitcoin fell nearly 21% and for the first time in half a year fell below $7 thousand Sharp reduction in price of digital coins experts associated with the actions of the authorities of the PRC. So, after the statements about the need to develop blockchain technology, the country’s leadership decided to keep a ban on operations with electronic money. In addition, the pressure on price also had a mass Exodus of miners from the market. According to analysts, in recent months the mining of cryptocurrency has become less profitable. In this regard, may change the rate of bitcoin before end of the year at RT.
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Since the beginning of November the global cryptocurrency market is markedly reduced. For the first three weeks of the month the exchange rate of bitcoin has fallen by more than 21% and ahead for the first time since may, fell below $7 thousand per coin.
Similar trend was showed and other digital assets. For example, the Ethereum fell by 23% (to $147), Bitcoin Cash — 33% (up to $205), Litecoin — 28% (to $46), and RIPL — 26% (up to $0,23). The total capitalization of the market of electronic money has decreased by 24% and today is about $195 billion Such data results in the portal Coinmarketcap.
At the end of October, bitcoin showed rapid growth and was trading near the level of $9-10 thousand per coin. As suggested by RT interviewed experts, the recent fluctuations are largely related to the actions of the Chinese authorities.
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On October 25, President of China XI Jinping stated the need to develop the blockchain in China and encouraged to actively introduce the technology in various sectors of the economy.
«We should accept blockchain as an important breakthrough for independent innovation of key technologies. We need to specify the main direction of development, increase investment and focus on key core technologies and to accelerate the development of blockchain and industrial innovations», — Interfax quotes the head of China.
Recall that the blockchain is the basis of work bitcoin is a database that contains information about all executed transactions. Meanwhile, in 2017, the financial authorities of China began to introduce strict regulation against bitcoin and its analogues in the country. Thus, the people’s Bank of China officially banned the ICO (initial public offering cryptocurrencies) and conducting any trading with digital assets.
Against this background, investors reacted positively to the words of XI Jinping. Market participants expected that after the remarks of Chairman of the PRC Central Bank of the country will start to soften the regulation of cryptocurrencies. However, in November the mood of the players changed dramatically. About this RT said the head of affiliate programs investment educational platform «Line» Vyacheslav Maksimenko.
«The investors came to realize that cryptocurrencies are still burning red light. Recently in the media appeared information about the termination of the Shanghai office of one of the largest kryptomere planet Binance after the police RAID. When this was previously blocked account Binance and other kryptomere in the social network Weibo. At the same time the people’s Bank of China promised «to identify and combat activity associated with the cryptotrading» — said Maksimenko.
According to the Chinese Central Bank, transactions with the digital currency continues to remain illegal in China and pose financial risks for investors. In addition, the regulator urged not to confuse the concept of the blockchain and cryptocurrency as the policy of the Chinese authorities against both technologies is different.
The second main reason for the observed collapse of cryptocurrencies RT interviewed analysts believe the mass Exodus of miners from the market. Note that the issuance of the new amount of cryptocoins is due to the mining of solving complex mathematical problems and the emergence of a new block in the network blockchain. Each block is an array of data, where there is information about all the transactions since the previous block. For the solution of the problem miners are rewarded in bitcoins.
Cheaper makes cryptocurrency mining digital coins less profitable. As a result, the miners had to stop their work because of lack of funds for expensive equipment.
«With the continuation of the current trend to reduce or even to stagnation of the bitcoin exchange rate first to come under attack by private miners because of the high cost of production, which is estimated in $5,5—7 thousand per coin, depending on the geography and equipment», — told RT the head of Department on work with wealthy clients IK «Oriole Capital» Ivan Markov.
As the expert believes, to compensate for the care of small miners could have a big company, mining cryptocurrency. So, according to Markov, mining industry is still more cost-effective and resistant to sudden fluctuations.
In General, RT interviewed analysts still hold different assessments of future trends in the cryptocurrency market. As the expert of the company «international financial center» Gaydar Hasanov, in the coming months, the bitcoin exchange rate may continue to fall to $6.5 thousand At the same time Director of the Academy of management Finance and investment Arseniy Dadashov expects depreciation to $3-4 thousand
At the same time, Ivan Markov predicts the stabilization of the exchange rate of bitcoin at $6-9,7 thousand per coin before the end of 2019. According to him, the beginning of 2020 may be accompanied by regular price fluctuations.
«The first half of 2020 can be bitcoin interesting and volatile. In the case of overcoming the mark of $10.5 m will open the course to storm the local maxima for $14 thousand per coin,» concluded mark.