Crypto News, News

Bitcoin Extends Drop After One Of The Worst Weeks For Crypto In 2024

By Eric George


Reviewed by: Eric George


Drop in Prices of Bitcoin

The price of Bitcoin, which was poised to be the most powerful cryptocurrency, is on a continued downfall now. The second-worst week in the history of cryptocurrency in 2024 was last week.

The price fall of Bitcoin has cast a shadow of uncertainty on the proposed Bitcoin Exchange Traded Fund (ETF) and other proposed regulatory measures.

In the last week, the market value of the top 100 digital assets fell by 5%, which has been a major setback to the credibility of cryptocurrencies. Bitcoin’s prices declined by 8.1% to $ 58,528.

Not only was it a bad week for Bitcoins, but Ethereum and Solana also experienced significant declines in prices, but the price drop of Bitcoins is causing all the worry in the market.

What are the Reasons for the Continued Drop in Prices of Bitcoin?

The fall in the prices of Bitcoin is not an isolated occurrence, but it is caused by many microeconomic and macroeconomic factors. Some of the most important factors that are causing a hard time for this cryptocurrency giant are explained below.

  • The Bitcoin halving event, which took place last month, has failed to attract the expected number of investors to the coin, in contrast to what was expected.
  • Investors are of the impression that the US Federal Reserve is unlikely to reduce the interest rates shortly owing to the global political instability.

    The recent tension between Iran and Israel and the continuing enmity between Russia and Ukraine have had ramifications in the crypto market too.

Drop in Prices of Bitcoin

The other major factors affecting the price of Bitcoins are supply, demand, cost of production, number of competitors, regulatory measures, and media coverage.

The demand and supply of any asset is the main determinant of its price. For selling under high prices, Bitcoins should have a high demand and a comparatively low supply.

To maintain the market scarcity of Bitcoins, only a very small number of tokens are mined every year. Moreover, the demand for Bitcoin has increased in recent years in countries where there is a high inflation associated with the fiat currency.

Another factor contributing to the decline in prices of Bitcoins is the competition that it faces in the market from other similar coins. Unlike the time of its launch, there are thousands of alternate coins in the market now that compete with Bitcoin.

The competition that the coin faces in the market is evident from the fall in its market capitalization from 80% in 2017 to 55% in 2024.

Bitcoin is decentralized and in turn unregulated. The absence of regulations makes it a favorite entity for cross-border transactions.

However, the rulings by the U.S. Securities and Exchange Commission (SEC) regarding implementing regulations on the digital currency market.

After the initial price rise in response to the announcement of the Bitcoin ETF, the prices of the coins fell to $ 40,000, in fear of the market becoming regulated.

The general instability in the U.S. financial systems, the possibility of global inflation as a consequence of the Russia-Ukraine war, and the high interest rates in the U.S. and U.K. markets are also factors that cause the price fluctuations for Bitcoin.

The Bottom Line

Bitcoin has always been a strong contender in the market, disregarding its occasional price fluctuations. It is always considered a good long-term investment plan to add to your portfolio.

The recent price fall is largely due to temporary effects, and this situation is expected to get better in the future. Investors should make decisions informed by the market trends from time to time so that they do not incur any loss in their cryptocurrency investments.

That being said, you can always set aside 5% to 10% of your portfolio for Bitcoin investments.

Eric George

Eric George, a retired journalist, focused primarily on market research and current tech trends. With a career spanning news media, he made significant contributions to understanding the intersection of technology and finance. Today, he continues to engage with these topics in various capacities

View All Posts

Leave a Comment