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Bitcoin carnage | Everything that happened in the cryptocurrency world this week

On 16th May 2021, the global cryptocurrency market had a market capitalization of around $2.2 trillion. On Sunday, after seven days, it stands at around $1 trillion. The market stands in red, with all major cryptocurrencies trading at levels lower than their earlier prices.

May 23, 2021 / 07:56 PM IST
On May 22, 2010, software developer Laszlo Hanyecz agreed to pay 10,000 Bitcoins for two pizzas.

On May 22, 2010, software developer Laszlo Hanyecz agreed to pay 10,000 Bitcoins for two pizzas.


Crypto investors watched with bated breath as the valuations of various cryptocurrencies swung wildly, hitting record high and low prices within the last seven days. While many market analysts saw this as a much-needed market correction, investors went on to report losses, anger, and inability to transact effectively across platforms, as major cryptocurrency exchanges like WazirX, Coin DCX, and others crashed under the overwhelming volume of transactions. Here’s a brief explainer on what transpired during the week in the cryptocurrency space:

Wild, Wild West

On 16th May 2021, the global cryptocurrency market had a market capitalization of around $2.2 trillion. On Sunday, after seven days, it stands at around $1 trillion. The market stands in red, with all major cryptocurrencies trading at levels lower than their earlier prices.

Elon Musk, the eccentric Tesla entrepreneur kicked off the rapid tumble when he announced that he will not be accepting bitcoin payments for his cars, given the insane energy consumption that is involved in mining these currencies. The market crash post the announcement was significant, with bitcoin falling to as low as $46,000/coin from its earlier high of $54,700/ coin.

Calling out the unjustifiably high influence Musk has on crypto markets, a group of developers came together to launch $STOPELON, a counter-crypto community that aims to take over Tesla and stop Elon Musk from manipulating markets. Currently trading at around $0.0001214, $STOPELON has a total market capitalization of $63,471,075.

Close

Further dampening the global cryptocurrency market sentiment was China’s announcement of banning financial entities to engage in products and services related to cryptocurrency. Given that the country remains the hub of crypto mining and is the biggest contributor of cryptocurrency trades in the world, the prices went tumbling even more. 

However, many market experts viewed the fall as necessary and coming. Per Neeraj Khandelwal, CTO and Co-founder, Coin DCX, the restrictions placed by the Chinese government are merely precautionary in nature. “Bitcoin is a store of value and should be treated as an asset class with a long-term forecast on gains. Price corrections are a part and parcel of every asset class and bitcoin is no stranger to the same.”

Analysts said that this was a necessary shake-up the market needed and now, only solid investors will remain, eliminating all novice investors looking to make quick bucks off crypto trading. 

Paytm Payment Bank severs ties

In yet another shocker, Paytm Payments bank also severed ties with major cryptocurrency exchanges like Wazir X and more, joining the likes of ICICI and Yes Bank, who have already distanced themselves from cryptocurrency-related transactions. While Wazir X tweeted that it is going to roll out a few more deposit options in the days to come and that the investors can use the P2P exchange, for the time being, this decision highlights the grey regulatory landscape of the Indian crypto space.

In 2018, a circular by RBI directed all banks to not engage in virtual or cryptocurrency transactions. This was overturned by the Supreme Court of India in March 2020, which was seen as a positive sign for cryptocurrency to flourish in the country. In fact, recent reports also suggested greater room for discussion on the potential of cryptocurrency, with the government potentially forming a panel to come up with ways to regulate this digital asset class. 

Reds all around

Trading at $34,000, bitcoin fell around 29.5 percent since last week. Ethereum also tumbled around 45 percent in the last 7 days to trade at $2,000 currently, while parody currency dogecoin slipped 40.93 percent to trade below $1. The only green shoots noticeable were of the cryptocurrency Tether, which rose around 0.09 percent during the last week to trade stably at 1 dollar. 
Ira Puranik
first published: May 23, 2021 06:26 pm

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