3 main reasons behind Bitcoin’s sharp decline

The price of bitcoin fell sharply and suddenly during the first trading sessions of the week, coinciding with awaiting the decision of the monetary policy meeting of the Federal Reserve (the Central Bank of America), as well as absorbing concerns about Binance, while the launch of a new cryptocurrency was perhaps the most important matter in pulling the rug a little from under the feet of the world’s largest cryptocurrency.

Bitcoin fell by 3.46% to $29,084 by 16:09 GMT, its lowest level in five weeks.

Although the reason behind the sharp decline is not clear, the move coincided with a report by the Wall Street Journal, which added to recent investor concern about Binance.

As the report states, CEO Changpeng Zhao suggested in a private conversation in 2019 that Binance affiliates took up a portion of the trading volume around the time it launched its trading arm in the US.

There are questions as to whether this activity constitutes “trading laundering” with the aim of inflating trading volume.

Binance is the largest crypto exchange in the world. She was sued by the Securities and Exchange Commission last month and is at the center of a Justice Department investigation that will likely end in a consent or settlement decree, some press sources previously reported. Federal prosecutors have been examining anti-money laundering violations and sanctions evasion charges, allegations that will make it difficult for Binance or its founder to continue to obtain licenses to operate.

Another reason that observers say may have had a major impact on Bitcoin’s sharp fall is that Sam Altman, CEO of artificial intelligence firm OpenAI, launched his cryptocurrency project WorldCoin on Monday.

The most important offering of the project is the World ID, an account that only humans can apply for, as it requires those who wish to create an account to register for an iris scan using World Coin technology called Orb, which is a silver ball about the size of a bowling ball. Once it is verified that the applicant is a real human being and not a “robot”, they will have a global identity.

The company behind the Worldcoin project is Tools For Humanity, based in San Francisco and Berlin.

The project saw more than two million registration requests for the global identity during its trial period. With the launch of WorldCoin on Monday, operations will expand to 35 cities in 20 countries. As a means of incentive, the company offers those who apply to register in certain countries a token of the WorldCoin cryptocurrency (WLD).

Market observers indicated that the new currency may have withdrawn some of the liquidity in the cryptocurrency markets.