Why does encryption crash?

Why does encryption crash?

Early Monday morning, Investing.com chirp Some troubling news for the crypto community: Bitcoin’s price fell below $19,000 to $1,8802.1, further below the “psychological threshold” of $20,000.

And Bitcoin was not alone in its losses.

The original Ethereum token, Ether, dropped further: showing a drop of just over 10% and trading at $1,303.42.

What can cause the drop?

As the Federal Reserve continues its efforts to tame inflation by raising interest rates, investors across the board have pulled out, and cryptocurrency is no exception. While the economy remains uncertain, individuals avoid risky assets.

In addition, the long-awaited Ethereum”to merge“It was completed last week, making it a Proof of Stake blockchain instead of a Proof of Work blockchain.

what does that mean? Basically, Proof of Work is done through mining, while Proof of Stake is through existing owners putting their coins (or stake) at risk to validate transactions in the blockchain. The Merge’s biggest gain is that it’s better for the environment – it uses far less energy than Proof of Work transactions.

Related Topics: Will Ethereum “Merge” emerge victorious?

However, there is a caveat. With merger news, comments made by Securities and Exchange Commission Chairman Gary Gensler’s The Wall Street Journal She points out that coins that allow holders to validate the coins through stakes will classify them as collateral, which means they are required to undergo regulation by the Securities and Exchange Commission. This is a fact felt by many cryptocurrency investors, as the nature of the currency is rooted outside government regulations.

Related Topics: “We are the first group to lose”: Black Americans are hard hit by the cryptocurrency crash

It’s unclear when — or if — the crypto will bounce back above the psychological $20,000 limit, but as of 10:24 a.m. MondayBitcoin price has already risen above the threat level of $18,802 and is trading around $19,210.

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