Blame it on the moon
Bitcoin crash near Lunar New Year
A CRYPTOCURRENCY expert has offered a strange explanation for why Bitcoin’s price crashed so hard in January. But is it as wacky as it sounds?
Bitcoin experts say a recent drop in the virtual currency’s value could be the fault of the moon.
A top trader says that January’s big Bitcoin slump could be partly related to the Lunar New Year, a major Chinese holiday, reports The Sun.
Some Bitcoin investors suffered major losses in recent weeks, after the world’s most popular cryptocurrency saw its value halved.
But Alexander Wallin, CEO of trading social network SprinkleBit, says a price drop in January was unsurprising.
“The January drop is a recurring theme in cryptocurrencies as people celebrating the Chinese New Year, aka Lunar New Year, exchange their crypto for fiat currency,” explains Wallin, as quoted by Bloomberg. “The timing is about four to six weeks before the lunar year, when most people make their travel arrangements and start buying presents.”
The Lunar New Year is the first day in the Chinese calendar, and is marked by huge celebrations and gift-giving.
The holiday itself takes place on February 16 but – just like Christmas – people rush out to buy presents ahead of time.
According to Wallin, people who were storing up Bitcoin exchanged it into real-world currency in order to fund their shopping sprees.
Due to the massive Chinese population at home and abroad, any culture celebrations can have a huge global impact – like a big Bitcoin price crash.
Although it’s unlikely that the Lunar New year is entirely to blame, there is some precedent behind Wallin’s theory.
Bitcoin’s value dropped at the beginning of 2017 too, falling from a high of $1162 to just $752 in January.
A similar fall was recorded at the start of 2016 too – so maybe check your lunar calendar before forking out for some digital dollars.
Bitcoin became the world’s first entirely virtual currency when it was introduced in January 2009 and remains the market leader.
New currency is created via a complex online process called mining which uses supercomputers to create new Bitcoins using computer code.
SO MAYBE CHECK YOUR LUNAR CALENDAR BEFORE FORKING OUT FOR SOME DIGITAL DOLLARS.