It is important to note that Bitcoin is not a Stablecoin. Therefore, it is susceptible to total crashing. In other words, Bitcoin prices can plunge and plummet to zero. And this occurs due to the high volatility that Bitcoin has. Over the past years, Bitcoin users have experienced significant price increase and decrease. From the projections at Immediate Edge website, you can quickly tell that Bitcoin prices can change fast.
For instance, the value of Bitcoin in 2018 is not the same as its current price. Crypto experts have attributed Bitcoin’s price fluctuations to several factors, including the global economic recession. The foundational fact is that there is room for an increase or decrease in Bitcoin’s value, depending on the time and the influencing factors. The most significant question that emerges, in this case, is what would happen in an instance where the value of Bitcoin hits zero? As a trader, it is always important to know your fate with Bitcoin should the value plummet at such a significant rate.
The forecast within the past few years is proof enough that Bitcoin’s value is highly volatile. And this means that you should be on the lookout for Bitcoin value changes and make the necessary decisions before encountering severe repercussions. What would happen when the Bitcoin value drops to zero?
The Rise of Competitor Coins
The current crypto market has severe competition. Some of the emerging cryptocurrencies are quickly catching up with Bitcoin. And this means that if Bitcoin’s value plummets to zero, the existing coins will soon catch up and dominate the crypto market. It might take a long period for Bitcoin to catch up with the competitor coins, even in an instance where it regains value. The current competition in the crypto market puts Bitcoin at risk of succumbing, especially if its value rapidly crashes.
Mining Returns Will Equally Fall
Notably, the amount of returns made through Bitcoin mining depends on the amount of Bitcoin mined. And this means that if the value of Bitcoin hits zero, there will be a subsequent drop in the returns generated through Bitcoin mining. The returns investors generate through mining would equally hit zero. Therefore, there will be a massive loss for Bitcoin miners. It will take an increase in the value of Bitcoin to regenerate returns through mining. There could also be some changes in the reward policy in Bitcoin mining, with the network adjusting to fit the shaky Bitcoin market.
Massive Sell-out
One thing bitcoin holders, traders, and investors acknowledge are that the market is highly volatile. Therefore, traders are always on their toes to make sell-outs of their holdings when they foresee possible losses. It is worth noting that Bitcoin’s value plummets or increases gradually. And this implies that you can quickly analyze the market performance of Bitcoin and decide to sell when losses are likely to occur. In an instance where projections indicate the likelihood of Bitcoin hitting zero, there would be massive sell-out during a recession.
The Bottom Line
While it may seem impossible for Bitcoin to plummet to zero, it is always necessary to prepare for such instances. The overall occurrence, in this case, would be an excessive loss to investors and miners. Therefore, it is crucial to safeguard your Bitcoin by ensuring that you make timely, strategic decisions. It is easy to evade losses if you have the correct information about the crypto market. Therefore, ongoing research is vital when you want to excel in Bitcoin trading or investing.