What is happening to Bitcoin?

Vladlena Martus 2022-09-29

What is happening to Bitcoin?

Any person who owns cryptocurrency and is interested in the topic of the cryptocurrency market this year felt in their skin what a crypto winter is and how exactly it begins.

​​Bitcoin, which appeared in 2008 and is now the most famous cryptocurrency with the highest trading volume, had fallen more than 70% from its best days in November 2021, when a single unit was worth almost $70,000! 

This is the third major correction in the history of Bitcoin, along with November 2018 and March 2020. After the recent sharp drop in cryptocurrencies, people are terrified. Is it worth it to be so afraid? How to react to the fall of the world's foremost cryptocurrency? And what is going on with Bitcoin right now? Let's figure it out together with Wisebitcoin!

We remind you again that cryptocurrencies are a risky tool for trade and investment. Be careful, and follow the news, analysis, and educational texts. 

Also, remember that this material is purely informational. We won't encourage you to invest and trade; we will talk about what's happening in the crypto world. 

What is going on?

During the year, BTC has gone through a lot. The first "red zone entrance" happened during the protests in Kazakhstan – the coin was worth $42 000. It all happened because this country is the second one in BTC mining. After that, the price fell to $40 000 – after the meeting of the US Federal Reserve Commission (FRS). The American regulator wanted to increase interest rates and reduce the country's Central Bank balance. The next fall was at the end of January – the coin reached $34 500 after the severe expectations of tightening the US monetary policy in 2022 due to inflation. In addition, the price was affected by the possible ban on the crypto market in Russia. However, the Ministry of Finance offered a softer concept for cryptocurrency regulation. The war in Ukraine that started on February 24th has also affected risky assets – especially after Coinbase's statements about banning Russian accounts due to the sanctions. 

This May 2022, Bitcoin fell by 8,3% to the $29 500 mark. It was the first time since the summer of 2021. Since the beginning of May, Bitcoin has fallen by almost 22%. 

Experts say that the considerable drop of BTC and the following fall of altcoins are the consequences of the subsequent occasions: volatility on world stock markets, the US Federal Reserve's rate hike, rising inflation, and exit from risky assets. However, in May, Coindesk reported a rise of BTC by over 10% to $30 345. 

In early June, the Bitcoin price had fallen to $29,000, in the middle – to $25,000, and then it fell further. On June 18th, the price dropped to $17,744. The recovery was not huge: only a couple of thousand, to $20,000. 

After that, on July 13th, Bitcoin's price collapsed again to almost $19,000 as a reaction to the bad monthly inflation in the United States. To the $23,000-$24,000, Bitcoin had returned only by the end of August. But then it fell again to $19,600 on August 29th, then to $20,100 in September. CoinGecko crypto aggregator has claimed the BTC price loss at 58.8% in the past year.

Today the BTC price is around $18,916.

Let’s remember the reasons for BTC’s high volatility 

The price of BTC depends on many issues that make it volatile from time to time. We can include the following principal reasons:

  • The news of companies and banks, like Tesla, for example. The price immediately rose when they announced buying $1.5 billion worth of BTC.  
  • Restrictions in countries play a huge role in the crypto market. For example, China's authorities banned banks and payment systems from providing services with cryptocurrencies and announced bans for miners and traders.
  • Adoption as a legal tender like in El Salvador. Firstly, the BTC rate rose because of the news, but after the authorities began to control it, BTC fell. 
  • Important announcements from the regulators like SEC. In 2021 they allowed the release of a fund based on BTC on traditional exchanges. 

What to do with all of this information?

So, the volatility will continue, the experts say. If you're an investor that uses cryptocurrency, "keep your crypto investments to less than 5% of your total portfolio. If you believe in the long-term success of Bitcoin, "just stop checking on it and live your life. That's the best thing you can do," the personal finance expert of Humphrey Talks. 

Ensure your vital funds and financial state are safe, such as retirement accounts, emergency savings, children's college money, and more. It is necessary not to exceed 5% of your savings. Try not to be influenced by the drop, and don't let a sudden price increase change your long-term investment plan. 

Our recent guest, the guest from our blog about the crypto-ladies, Kiana Danial from Invest Diva, says, "While in the long-term Bitcoin's price has generally gone up, we experience a lot of volatility along the way." Thus, the drop in Bitcoin shouldn't be anything new for investors. No worries about fluctuations! Nobody needs to jump on the hype, as it can lead to the total loss of the funds. 

So, if you have a question on how to behave or what to do, remember one thing: not to look at the ups and downs if you use crypto assets as a long-term investment. If you let yourself emotionally react to this, you'll be worried, nervous, and, at the end of the day, wrong. The stress hasn't ever been good for any of the investment plans. 

The latest Bitcoin correction is "just another one," many analysts say. One of the factors that influenced that is the rise of BTC mining with blockchain, which causes high energy consumption. The "big whales" are pretty pragmatic and could sell their digital assets, as they are no longer profitable to be produced. 

Thus, be calm and watch out for the news. It is easier to save your funds by monitoring the information and news, and overreacting. 

Where to buy or check on Bitcoin if needed or our most favorite paragraph! 

Wisebitcoin is a reliable cryptocurrency trading exchange platform that provides excellent service and conditions for crypto trading. You can easily create an account and buy cryptocurrency – our interface is user-friendly, and our support team will be ready to help you anytime you need it. 

We offer our traders deep liquidity, 100X leverage, and cloud services that unify over 200 other cryptocurrency exchanges worldwide. It has different kinds of wallets inside the platform to keep your cryptocurrency and trade when you decide. In addition, our main priority is to keep our traders informed about the latest events, and we secure their assets as much as possible. 

Wisebitcoin is also connected to the cloud of 15 million users and more than 280 merchants. That helps us be one of the most promising and attractive platforms to work with. 

Join Wisebitcoin and be up-to-date with worldwide events and their affection for the cryptocurrency market! We hope to become a great partner in your crypto journey! And also, read Wisebitcoin. We have a lot of great and exciting blogs there.