• Bitcoin drops 35% in less than a month.
• Musk’s opinions cause drops in the most popular cryptocurrencies.
The crypto market capitalization has fallen by 23% in the last five days due to various speculations in the market. This drop is also affected by Elon Musk’s comments regarding Bitcoin and the actions that the company will take from him. As Bitcoin drops, the other cryptocurrencies maintain that downtrend.
The market value for cryptocurrencies reached $1.97 trillion last Monday, corresponding to its lowest peak. Recently, the crypto market was capitalizing at $2.56 trillion until the beginning of May. CoinMarketCap indicates this drop in value is greater than 30%, never seen before in such a short period.
Crypto market going through delicate period
According to Edward Moya, a market analyst at Panda, cryptocurrencies are going through a challenging period. This has come about because of Musk’s position on Bitcoin by suspending car payments with the cryptocurrency. Musk maintains that Bitcoin is a dangerous currency for the ecosystem and therefore is taking steps to avoid using it.
Bitcoin remains below $43 billion, reaching the lowest point since its fall in February. But Ether fell 8% this weekend, causing significant losses to its traders. The cryptocurrency ADA lost 10% of its value, while Dogecoin sank 7%.
The entire crypto market is in crisis since the Bitcoin crash, which determines how important its value is. However, the cryptocurrency Solana increased in value amid such an unfavorable field in the market. Solana increased by 0.2% due to its low speculation.
Reasons for drop in crypto market
Bitcoin lost value after Musk indicated on Twitter that he could have sold his Bitcoin holding. The cryptocurrency crash was almost automatic but then recovered when Musk clarified that he still held his stake in Bitcoin. These ups and downs in capitalization occurred days after Musk announced that Tesla would not accept the cryptocurrency as payment.
But Musk indicated that Dogecoin might be the only payment method to buy the cars at Tesla. The crypto market has stabilized with this announcement despite Bitcoin losing money from Musk’s comments. The fight with Bitcoin arose after Musk pointed out the significant damage mining causes on an ecological level.
Wave Financial manager Justin Chuc recalls that Bitcoin is down 35% for the entire month, which is depressing for traders. The speculation that Musk has generated in the crypto market is very great, which is somewhat worrying. Although Bitcoin is not green, it is still the most valuable cryptocurrency, and its fall brings misery to the market.
While the crypto market is in decline, it is likely to rebound from this wrong time in its capitalization. Bitcoin may be renewed in the coming months to be more ecologically safe and “green,” as Musk suggests in his tweet. A further rise in Bitcoin may bring a better price to altcoins, which would stabilize the market.