What appeared to be a phase of stability in Bitcoin’s price has now all but ended. The world’s most popular cryptocurrency logged over a 20 percent increase in its value last week, its best performance in three months, but it has again started losing value. After surpassing the $42,000 (roughly Rs. 31 lakhs) mark last week, the digital coin had crashed to under $38,000 (roughly Rs. 28 lakh) by Wednesday morning (August 4). Market analysts say the decline could be a result of profit-booking by short-term investors and, therefore, temporary. But it’s difficult to say whether Bitcoin will stay there for long, given the high volatility it has shown lately.
Bitcoin had lost more than 50 percent of its value from its mid-April record of around $65,000 (roughly Rs. 48 lakhs), following the cryptocurrency market rout in May, and crashed to under $30,000 (roughly Rs. 22 lakhs). Gradually, it recovered and again breached the psychological barrier of $40,000 (roughly Rs. 30 lakhs) in late July. Its rally continued into this month. However, the virtual currency has been losing value since its recent peak on Sunday, according to an analysis of the performance data available on CoinMarketCap.
At the time of writing this report, Bitcoin price in India was at $37,852 (roughly Rs. 29.06 lakhs), losing a further 1.50 percent in the past 24 hours, the data showed.
Besides profit-booking by some investors, the decline could ale be because of the intensifying scrutiny of the industry, including China’s crackdown on mining operations and US lawmakers’ push for collecting more taxes from cryptocurrency investors to fund infrastructure projects.
Last month, Bitcoin’s recovery was aided by positive comments from the billionaire CEO of SpaceX and Tesla Elon Musk, who had criticised fossil fuel use in mining the cryptocurrency earlier this year, along with speculation that Amazon could be looking to get involved in the cryptocurrency sector. The e-commerce giant, however, denied such reports and said, “Notwithstanding our interest in the space, the speculation that has ensued around our specific plans for cryptocurrencies is not true.”
Last month, Musk said that Tesla had a major Bitcoin investment and could restart accepting Bitcoin as payments after due diligence over renewable energy used to mine the currency.