MBA IN SIMPLE WORDS

6 Factors Behind Cryptocurrency Market Decline

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CENTRAL BANK POLICIES

#1

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Central banks hiking interest rates can decrease trading activity and liquidity in the cryptocurrency market.

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EXCHANGE TROUBLES

#2

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The downfall of major cryptocurrency exchanges like FTX caused a market downturn.

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VOLATILITY

#3

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Cryptocurrencies are highly volatile, with significant fluctuations in their value due to various factors like investor sentiment, media coverage, and regulatory actions.

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DEFLATIONARY DYNAMICS

#4

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Cryptocurrencies have deflationary dynamics as the supply of cryptocurrencies can decrease if people lose their private keys.

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ETHEREUM NETWORK ISSUES

#5

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The cost-prohibitive nature of trading on the Ethereum network has led to users flocking to altcoins, causing a decline in Bitcoin's market share.

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UNCERTAINTY

#6

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Cryptocurrencies are a new and rapidly evolving technology, and their behaviour is difficult to predict, leading to uncertainty and volatility in the market.

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