The Main Reasons For Bitcoin Drop

2 min read
The Main Reasons For Bitcoin Drop

The Main Reasons For Bitcoin Drop

In spring-summer 2022, we became witnesses of the crypto market collapse. The first asset that crashed was Bitcoin. Its rate drop started in May 2022, falling below $40,000. Important to note that 6 months before the crash, the BTC rate reached its all-time high of $68,000. Today (as of August 2022), the BTC crypto prices live to show the level of $23,18. Such a significant BTC drop pulled the whole market down, so all other crypto asset rates followed this trend.

Let’s find out what was the reason for such a collapse in Bitcoin price.

Why Has Bitcoin Dropped?

There are several reasons why the BTC rate crashed:

  1. FED increased interest rates
  2. News background 
  3. Binance’s temporal block for BTC withdrawals

The US Federal Reserve increased the interest rates by 0,50%. That was the most significant increase since 2000. Once the interest rate increase was announced, the BTC price grew to $40 000, but inflation caused a panic market mood, and crypto markets dropped. 

News background has a significant impact on crypto prices. Since inflation has increased, many investors fear this is only the beginning and doubt the FED’s ability to manage inflation.  

Binance technical problems. Amid overall market sentiments and increased inflation, there was another cause for the BTC drop: in June, the Binance exchange went through technical issues, and since the system was unstable, the platform blocked BTC withdrawals for a while. It also impacted the asset’s rate.

That were just a few main reasons for the Bitcoin price drop. However, we all know that the crypto market is cyclical – a bullish market trend replaces every bearish trend, and sooner or later, it will happen again. 

In the meantime, we can take advantage of a total market drop, for it is an excellent time to buy crypto assets at lower rates and hold them long-term. You can use the WhiteBIT crypto platform for buying digital assets, trading or a long-term investment. The exchange offers a reliable crypto wallet and users’ accounts protection of several layers.