(FreedomBeacon.com)- The turbulent cryptocurrency market that took a hit after CEO Elon Musk announced that Tesla would no longer accept bitcoin in payment isn’t getting any better. Over the weekend, bitcoin prices were in freefall – dropping more than 50% from its peak value in mid-April.
And it’s not just bitcoin. Cryptocurrencies across the board are seeing a decline.
But according to Mark DeCambre at Market Watch, while bitcoin is falling, it shouldn’t be considered a crash. Bitcoin, DeCambre explains, is an asset known for volatile periods.
Though bitcoin is down 50% from April, it is still up 16% so far this year compared to 2020.
The current freefall in bitcoin is not due to one specific event. Instead it is being blamed on fear — in large part due to reports on Friday that the Chinese government may crack down on digital assets.
Elon Musk’s announcement earlier this month didn’t help matters to be sure. It was Musk’s support for cryptocurrency to begin with that caused an uptrend. So it is hardly surprising that his decision to stop accepting bitcoin until ut becomes more environmentally-friendly would cause the market to take a hit.
Meanwhile, many investors have shifted away from cryptocurrency back to gold futures since gold has been enjoying steady increases in recent trading.
To make matters worse, crypto trading platforms including Coinbase Global experienced outages which may have put even more pressure on prices.
Billionaire Mark Cuban referred to the current plummet in bitcoin as the “Great Unwind” — blaming the current slump on excess leverage and speculation on alternatives to bitcoin.
But the bottom line is bitcoin and crypto are inherently volatile investments. And any major drop does not necessarily indicate an overall market crash.
The US Treasury Department, meanwhile, announced that it wants businesses to begin reporting to the IRS any cryptocurrency transaction exceeding $10,000. This is currently the law for any cash transaction, but Treasury wants to expand it to include crypto.
According to a Treasury Department report, the gap between taxes paid and taxes owed to the federal government is estimated at more than half a trillion dollars. IRS Commissioner Charles Rettig recently claimed that under-reporting and non-reporting on cryptocurrency gains may play a role in that gap.