The prices of the world’s largest cryptocurrency Bitcoin (BTC) and the second largest cryptocurrency Ethereum (ETH) are falling sharply. There are many reasons for this sharp fall including the Indian Crypto Tax 2022, US Federal Reserve Policy Change, Ethereum Merge, etc.
For small traders and investors, this fall is highly impactful, the investors who have invested before these reasons of crypto fall are seeing their portfolio in red for a long time. All Altcoins including Shiba Inu, Dogecoin, Polygon, Solana, Cardano, Mana, Gala, etc. are also showing red candles for a long time.
What Are The Main Reasons Behind Crypto Fall?
There are many reasons behind the crypto fall some of them are below:
1. Indian Crypto Tax Law 2022
In India, the biggest reason for the crypto crash is the crypto law passed by the Indian government in this monsoon session. In starting of the year 2022 Finance minister Nirmala Sitharaman proposed a crypto bill in the monsoon session and after a few debates and discussions on the bill, the government passed the bill.
According to this law now crypto transactions are being charged. Indian crypto exchanges have also started charging 1% TDS on buy and sell transactions. Apart from this TDS the investors have also to pay a 30% Tax on capital gains from virtual digital assets investments.
2. US Federal Policy Change
Another biggest reason is the US Federal Reserve policy change. This year the US federal reserve is increasing the interest rates. This sudden policy change by the US Federal is a step to control rising prices due to high inflation. Till now the US Federal Reserve has five times increased the interest rates. Due to this federal reserve policy change, institutional and big investors have taken their funds out from virtual digital currencies. This resulted in a sudden fall in the prices of cryptocurrencies.
3. Less Support Of Banks To Crypto Exchanges
Another big reason for crypto panic among Indian crypto users and investors is the unsupportive banks to crypto exchanges. Before the Indian crypto law, there were many options like UPI, Net Banking, and wallet services to add the funds in crypto exchanges for trading. But after the law has passed the banks removed support to crypto exchanges and this resulted in sudden panic creation among investors. Now there are a few exchanges that are providing net banking or P2P services to add funds to the crypto wallets.
4. Chinese Crypto Crackdown
In starting of the year china also announced a full crackdown on cryptocurrency mining and usage. As a result, many crypto mining companies either shut down or shifted their operations from china. But this chines crypto crackdown seems less impactful on cryptocurrencies as compared to upper reasons.
Should You Buy Bitcoin (BTC) And Ethereum (ETH) In This DIP?
Now the question is should you buy Bitcoin, Ethereum, and other Altcoins in this dip? Before jumping to a quick conclusion, let us understand this question. Some big investors like crypto whales and institutional investors may see this huge fall as an opportunity for them and there may be some other small or medium investors who may see the full loss in crypto investments. We are not giving any advice for crypto investments in this post.
But from my point of view, this is an opportunity to invest some money in Bitcoin, Ethereum, and other Altcoins including meme coins and metaverse coins. You should remember that cryptocurrencies are highly volatile in nature and prices suddenly fall and increase. In every fall there is always a piece of bad news behind it and it depends on whether you see it as an opportunity or not.