Why did Bitcoin crash and will it go up again?
BITCOIN has plummeted to an 18-month low as investors sell-off their holdings.
The price of the cryptocurrency plummeted by as much as 15% on Tuesday morning (June 14).
Bitcoin, the world's most popular crypto coin, fell as low as $20,950, according to coinmarketcap.
It has since trimmed some of those losses is currently trading at $22,737.85 at the time of writing, and is down over 8% in the past 24 hours.
Cryptocurrency prices have plummeted and Bitcoin is down 66% from its all-time high of $67,802.30 last November, the Wall Street Journal reports.
It's not the only cryptocurrency which has taken a tumble amid a global downturn in cryptocurrencies which have shaved thousands of pounds from investments.
Read more on crypto
Ethereum and Tether - the world's second and third largest crypto coins respectively, have also plunged in recent weeks.
Of course returns when investing are never guaranteed, even more so with cryptocurrencies.
Crypto markets are highly volatile and prices can go down as well as up and in the blink of an eye.
You can lose all of you money and as it's unregulated, there's no one to complain to if things go wrong.
Most read in Money
They can also be complicated and you shouldn't invest in products you don't understand.
You should also be wary of scams as cryptocurrencies aren't regulated in the UK.
You can lose all your money investing in crypto and you're highly unlikely to get it back.
Recent plunges has sparked fears about the long-term future of cryptocurrencies, and whether the market will ever recover.
Why has Bitcoin crashed?
Bitcoin, and other cryptocurrencies like Ethereum, have plunged in, reflecting the global markets and fears over inflation and interest rate rises.
Concerns over rising prices and rate rises have affected the mainstream markets, and that has also had a knock on effect on crypto values.
Adrian Lowery, financial analyst at Bestinvest, said: " These levels are a 20% drop from bitcoin’s price on Sunday, and the lowest since December 2020, when bitcoin and other cryptos were soaring amidst the ‘risk on’ euphoria of the mid-stage pandemic.
"The latest falls overnight were sparked by the same worries that have hit equity markets – a and fears of steeper interest rate rises globally.
Another cryptocurrency, Celsius, has frozen withdrawals amid market volatilty, which has then had a knock on effect on the wider market.
Celsius' own crypto token, CEL, is trading at just 20 cents per coin after tanking from $3 in April, according to .
Lowery said: "Major US cryptocurrency lending company Celsius Network – which had been offering annual yields of up to 17% on crypto holdings - froze withdrawals and transfers citing ‘extreme’ market conditions, only to be followed shortly afterwards by crypto trading giant Binance.
“Such moves will only add to jitters over the stability of the market in cryptocurrencies, which had already been stoked recently by the collapse of the Luna and Terra tokens.
"The world’s largest stablecoin Tether also temporarily broke its link with the US dollar last month."
He said investors are getting out of crypto to avoid further losses and shore up their position amid rising prices and the cost of living crunch affecting many countries.
He said: "The steep falls in crypto values are aggravated by a further consideration, which is that it is a market – unlike equities – dominated by retail investors.
"As inflation and growth fears have accumulated recently, investors have rapidly liquidated holdings, partly because they fear further price drops but also to shore up bank balances and safety-net savings.
"Long-term institutional investors in equities, while they have obviously been selling out of some markets, have not pulled the trigger to the same extent."
Previously drops in the price of Bitcoin have been prompted by regulatory crackdowns and bans in China and Russia.
Many crypto-mining regions in China are now radically reducing operations.
Previous moves by the country to crackdown on mining and trading of crypto has sent markets plunging.
And the unrest in Eastern Europe has contributed to the fall because investors tend to shun risk-sensitive assets during uncertain times.
Will Bitcoin go up again?
The price of Bitcoin is never guaranteed and could easily fall further, or go up.
A fall back from large plunges in no way means the coin will climb further.
Prices can go up and down in the blink of an eye - one day you might be up, but the next day you could lose all your money.
Interactive Investor head of investment Victoria Scholar recently told The Sun that investors could face a "crypto winter".
She said: "Recent price action serves as an important reminder of the wild swings that are characteristic of the crypto market that can on the one hand can create outsized gains for traders and investors but can also lead to damaging losses."
City of London watchdog the Financial Conduct Authority has warned that crypto is a high-risk investment and investors should be prepared to lose all their money.
READ MORE SUN STORIES
Read More on The Sun
A Terra Luna investor lost their entire £400,000 life savings after the crypto crashed.
While a student put all their money into crypto but lost out too.
We pay for your stories!
Do you have a story for The Sun Online Money team?
Email us at [email protected]