The topmost cryptocurrency by market capitalisation, Bitcoin (BTC) has been falling continuously for the last three days and is now trading below $60,000.
Top coins such as Bitcoin, Ethereum (ETH) and popular meme coins such as Shiba Inu (SHIB) and Dogecoin (DOGE) have fallen over 10 per cent over the last seven weeks, according to Coinmarketcap.com.
In the seven-week period, Bitcoin was at its highest on November 15, clocking $66,281.57, while on November 17 it went below $60,000 for the first time in two weeks.
Recent actions by China and the US may have been responsible for the falling Bitcoin prices.China with the intention to eliminate crypto mining from the country has started a crackdown on mining. "We will focus on cleaning out state-owned units involved in virtual currency and bitcoin mining, reiterating that all virtual currency-related activities are illegal. Virtual currency does not have the same legal status as legal currency," China Global Television Network quoted the country’s National Development and Reform Commission (NDRC) as saying.
Another major reason is the United States Securities and Exchange Commission (SEC) rejecting a spot bitcoin exchange-traded fund (ETF), which would likely have seen billions poured into the crypto market.
The US Infrastructure Bill which has been signed by Joe Biden at an event at White House on Monday includes new crypto legislation which requires brokers to issue a 1099-B which will be notified to the IRS. In simpler words, the gains will now come to notice and there will be tax implications and hence the market is reacting.
"The correction in Bitcoin and other cryptocurrencies could be due a mix of factors such as profit booking, China crackdown on cryptocurrencies and tax provision in the US infrastructure legislation," says Kumar Gaurav, founder and CEO of Cashaa, a cryptocurrency platform.
"Whether it is Bitcoin or any other cryptocurrency, it’s important that the investor understands the underlying project it represents and takes an investment decision accordingly,” says Gaurav.