Bitcoin recently fall below $20,000 after December 2020. This has made investors fear about Domino Effect.
Highlights
- Bitcoin holding around $20,000.
- Investors fear Domino Effect
- Domino Effect can be negated by careful decisions.
Due to the collapse of the crypto market, we hear the terms like crypto cap, these terms show the negative side of the financial system. Bitcoin or generally crypto has been a subject of market fluctuation and high price volatility.
What is the Domino effect?
Domino Effect happens when the market collapse and the investors feel that the market will not recover for some time. That Stretched period cause the investors to withdraw their money and would result in a further collapse of the market for a long time.
The Domino effect is neither good nor bad. It is just a chain reaction that happens due to some choices we made throughout. It can be a bad or good choice but it has a long-lasting effect.
Bitcoin has been on a downward curve for some time now. Bitcoin has nearly half the value it has last year.
Effects of the Domino effect
Domino effects always start with some reaction that chains through and becomes big. For Example, now that Bitcoin’s value is decreasing investors might feel like their investment might be difficult to get back after some time.
So, they are dissolving their assets, this liquification by some investors starts the reaction that leads to the start of a chain reaction.
This leads to more investor withdrawing and in the end whole market collapse.
This effect is a big concern and due to the nature of bitcoin nowadays investors fear this effect. This effect also leads to international price crashing which happens during a cross-border transaction.
This will lead to more downward crashing of the crypto market and ultimately loss of the investors.
The Bottom Line
Domino Effect is not good or bad but it is something that we need to keep in check when making decisions or choices. The domino effect can be good but it almost always leads to bad things so always rationalise before investing and withdrawing.
Read More: – Bitcoin and many other crypto value.
Learn more about Domino Effect here:- Domino Effect: What is the Domino effect? How it Can Affect the Crypto World
