Is It 2018 All Over Again?
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The 2018 price plunge was kickstarted by two major crypto exchange hacks. Then came reports of possible crypto regulation in Asia, condemnation by institutional investors and the SEC refusal to approve a ₿itcoin ETF. The ₿itcoin Cash fork was the cherry on top. ₿itcoin lost 85% of its value within 12 months.
Fast forward to 2021. Crypto exchanges are unicorns with enough resources to uphold strong cybersecurity standards. Crypto regulation is a predictable topic. ₿itcoin enjoys institutional support from both corporations and funds. No unexpected major coin forks are coming.
What really happened now was Fed confirming US interest rates will stay low to fuel post-Covid recovery. This pushed investors away from speculative investments towards traditional industries. ₿itcoin was in good company - Nasdaq slid 2% as investors looked away from tech companies.
Bitcoin reacting to macroeconomic events means it is more aligned with mainstream economy than in 2018. The future is always unknown, but while volatility remains, the factors driving the crypto market appear to be different than three years ago.