You can be on Entrepreneur’s cover!

Crypto Crash: Bitcoin Fell Below 6%, Ethereum Down 10% It's more bad news for crypto, but what's to blame for the ongoing falls in value?

By Madeline Garfinkle

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

Early Monday morning, Investing.com tweeted some sobering news for the crypto community: Bitcoin had fallen below $19,000 to $18,802.1, marking a further decline from its "psychological threshold" of $20,000.

And Bitcoin wasn't alone in its losses.

Ethereum's native token, Ether, dropped even more: showing a drop slightly above 10% and trading at $1,303.42.

What could be causing the drop?

As the Fed continues its efforts to tame inflation by raising interest rates, investors have pulled back across the board, and crypto is no exception. While the economy remains uncertain, individuals are avoiding risky assets.

Additionally, Ethereum's long-awaited "Merge" was completed last week, making it a proof-of-stake blockchain instead of a proof-of-work blockchain.

What does that mean? Essentially, proof-of-work is done through mining, whereas proof-of-stake is done through existing owners putting their coins at risk (or stake) to validate transactions in the blockchain. The biggest win for The Merge is that it's better for the environment — it uses significantly less energy than proof-of-work transactions.

Related: Will Ethereum 'Merge' Emerge Victorious?

However, there's a caveat. With news of The Merge, comments made by Securities and Exchange Commission chairman Gary Gensler to The Wall Street Journal suggest that the currencies allowing holders to validate coins through stakes would classify them as a security, which would mean they are required to be under regulation by the SEC. This is a reality that many crypto investors are wary of, as the nature of the currency is rooted outside of government regulations.

Related: 'We're the First Group Who Loses Out': Black Americans Hit Hard By Crypto Collapse

It's unclear when — or if — crypto will bounce back above its psychological threshold of $20,000, but as of 10:24 a.m. on Monday, Bitcoin had already risen above its threatening $18,802 and is trading around $19,210.
Madeline Garfinkle

News Writer

Madeline Garfinkle is a News Writer at Entrepreneur.com. She is a graduate from Syracuse University, and received an MFA from Columbia University. 

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Business News

From Tom Brady to Kevin O'Leary – See Who Lost Big in the Wake of the FTX Crypto Collapse

The crash exposed an $8 billion hole in FTX's accounts, leaving investors and customers scrambling to recoup their funds.

Business News

This Highly-Debated Piece of Cinematic History Just Sold For Over $700,000 at Auction

The wood panel from "Titanic" is often mistaken as a door. Either way, he couldn't have fit. (Sorry.)

Fundraising

Avoid These 9 Pitch Deck Mistakes When Asking Others For Money

Crafting an efficient pitch deck requires serious effort, but at least it's not wandering in the dark since certain rules are shaped by decades of relationships between startups and investors.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.