After being on a slow climb since its massive leg-up on February 4, Bitcoin has taken a hit when it comes to its price as prominent investors and other global factors cause fear, uncertainty, and doubt to flood the market.
Bitcoin broke its down-trend in late January and then experienced a massive increase in value on February 4, taking the digital asset from $37,000 to nearly $42,000 in a day, a jump by nearly 12%. The following days after the sharp increase in price, Bitcoin continued to rise, eventually failing to break the resistance at $45,000, which would have been a vital price point to re-take. From February 16-17, the price of BTC tumbled by nearly 10%, sending the price down from around $44,000 to where it is at the time of writing this article, $40,500.
So, why have we seen a sharp drop in the value of Bitcoin? There are several factors, and the first would be the stark words spoken by prominent legacy investor Charlie Munger, who said that he is proud of the fact that he hasn’t invested in cryptocurrency and that it should have been banned immediately. Munger describes cryptocurrency as a “venereal disease“. On top of comments from large investors spreading doubt throughout the cryptocurrency market, there are also the events between Russia and Ukraine that are injecting fear, uncertainty, and doubt into not only through the cryptocurrency markets but the stock markets as well.
Another factor that influences the public’s perception of the price of cryptocurrencies is Canada recently banning 34 crypto wallets that allegedly contain $1.4 million in BTC and other crypto coins. Furthermore, the Federal Reserve is expected to announce interest rate hikes at the beginning of March in a war against the growing inflation crisis that has spread throughout the US dollar.