Governments won’t sit around and let cryptocurrencies boom

The months of April and May have been wild for cryptocurrencies. Take the case of Bitcoin, the most popular crypto. On 14 April, its price touched an all-time high of $64,863. By 19 May, it had fallen by more than 50% to $30,682. At the time of writing this, it was at $37,270. This fall was driven by China talking about tighter crypto legislation to protect its financial system. What added to it was entrepreneur Elon Musk’s sudden concern about the environmental impact of Bitcoin mining.

Every bubble has a theory behind it. This is true for cryptocurrencies also. Cryptos have a fixed supply; hence, unlike government-backed fiat money, their supply cannot go up suddenly.