This is the largest drop in the price of the first cryptocurrency since March 12–13. On May 19, BTC was trading at $9,900, and yesterday its weighted average rate dropped to $8,750 — in a week, bitcoin lost 12% of its value.
Now the price of cryptocurrency has slightly recovered to $8,900. Since the “Black Thursday” on March 12, Bitcoin price rate has strengthened by 2.6 times, however, after the halving on May 11, the price went down.
The reason is the sale of coins by miners, says Charles Edwards, co-founder of the Capriole Investments crypto fund. To stay afloat after the reward halving, they have to cash out part of the coins. A similar picture was observed during the previous halving of 2012 and 2016, but after a while, the price recovered, so one should not be upset, the expert believes.
Bitcoin whales replenish the balance when the price of cryptocurrency decreases. During a recent drop from $9,500 to $8,600, large investors bought 12’000 BTC, Santiment reports.
“Since Bitcoin’s drop below $9,500 on May 20th, addresses holding 100 or more Bitcoin have added another 12,000 $BTC to their bags — more than $108,000,000 at current prices,” Santiment analysts said on Twitter.
They added that whales regularly accumulate coins into dips. For example, on March 12–13, when bitcoin dropped to $3,800, addresses with more than 100 BTC bought worth of $500 million of the cryptocurrency.
Chinese authorities intend to launch state digital currency ahead of schedule. This will allow the country’s economy to quickly get out of the crisis caused by the coronavirus epidemic, and will also help bypass possible US sanctions.
“Although the U.S. hasn’t put Chinese financial firms and institutions onto its Entity List, the U.S. may still pose widespread threats to Chinese institutions and impact the yuan’s standing in international settlement. In this regard, China’s state-run digital currency may be rolled out sooner than expected to counter a possible U.S. block,” the Global Times cites the words of the Chinese blockchain insider Cao Yin.
According to the analyst, the digital yuan will allow directing funds to sectors of the economy that are in need of support the most during the crisis. The launch date for the cryptocurrency is still unknown, but the head of the People’s Bank of China, Yi Gang, announced that it will be used during the Beijing Winter Olympics in 2022.