Bloodbath in crypto market: Here’s why $600 billion vanished into thin air and should you buy the dip?

All major and minor cryptocurrencies, including popular coins such as Bitcoin, Etherium and DogeCoin, nosedived in the past 24 hours. Most of the coins plunged by over 40% intraday to their lowest levels in the past few months, creating a panic among investors and the overall crypto market. 

While a few coins made a quick recovery, most of the cryptocurrencies are still trading in the red zone. Has the bubble finally burst? No one really knows. Crypto experts are saying that the correction was around the corner after the really long bullish rally. 

Anyways, if you were wondering what led to today’s fiasco then let us tell you that it has something related to China. Yes, the country that had banned all private coins a few years ago. 

Why did the crypto market crash? 

On Wednesday (May 19), China finally pulled the last plug on cryptocurrencies by banning financial institutions and payment companies from offering services that may relate to cryptocurrency transactions. 

The communist regimen also warned investors against speculative crypto trading in the latest Chinese attack on private digital coins. “Recently, cryptocurrency prices have skyrocketed and plummeted, and speculative trading of cryptocurrency has rebounded, seriously infringing on the safety of people’s property and disrupting the normal economic and financial order,” China’s authorities said in the statement.

The statement also pointed out the risks of cryptocurrency trading, saying virtual currencies "are not supported by real value", their prices are easily manipulated, and trading contracts are not protected by Chinese law.

Should you invest in the cryptocurrency market? 

If you’re planning to cash in on the crypto market crash, we must warn you that most coins are highly volatile and there are many factors that impact their valuation. For instance, one tweet from Tesla’s founder Elon Musk proved just enough to crash the prices of the most popular cryptocurrency, Bitcoin. He had argued that Bitcoin isn’t environment friendly. 

Moreover, the future of cryptocurrencies doesn’t look really good in India, considering the fact that the Indian government is likely to ban private digital coins, according to various media reports. Therefore, it isn’t advisable to risk your life savings in an investment mode that has more risks than rewards

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