Why the Crush in Bitcoin Price does not make Bitcoin Obsolete
Jan 23, 2018 Posted / 24424 Views
Bitcoin has never had a stable price for a long time since its emergence in 2009. The prices if the cryptocurrency always keeps falling and picking up due to different events happening around the world. These events include among others, a significant hack of a bitcoin platform like the Mt. Gox heist which resulted in several hundred millions of dollars worth of bitcoin being lost.
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Government decisions also have an impact on the prices of bitcoin, but governments always change due to regime change. Some government abolish bitcoin at first before going back to the drawing board and reinstating it but always with a regulation.
Compared to other commodities such as stocks, oil or gold the bitcoin market is rather small meaning any group of people with a significant amount of money can change the price in their favour. it takes injecting just a few hundred million dollars in the bitcoin network to swing prices upwards and vice versa.
With the constant rivalry, bitcoin is facing with emerging altcoins like Bitcoin cash, it's certain that the supporters of bitcoin Cash are doing everything possible to discredit bitcoin and promote Bitcoin cash. Soon enough when bitcoin receives significant financial boost prices will start to steadily rise.
When trading bitcoin prices are not set to a particular single value but rather prices defer according to the exchange one is using. Every exchange sets their own price applying to traders using such exchanges. Some sites collect all these different prices and try to average them out determining the final Bitcoin price. These index sites who calculate the average price of bitcoin from many exchanges do not actually trade Bitcoin. This now means bitcoin price fluctuates according to the platform you use, which is no such factor which can lead to bitcoin downfall
The Price fall is coming from other factors than the market demand of bitcoin
Bitcoin price fall is being generated from events independent bitcoin market demand and supply which are the true determinants of price. The price of bitcoin is moving in response to government regulator measures and stance on bitcoin. We all know that bitcoin cannot be stopped by any government but its use can be regulated in countries who opt for regulation. Yet bitcoin price is significantly swinging due to such government regulations.
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This is a false signal that does not actually affect bitcoin prevalence in the long run. The distribution of bitcoin users which is currently being dominated by Asians means any consensus reached between these majority bitcoin users can significantly affect the price of the cryptocurrency. But this factor will soon be phased out as bitcoin adoption is increasing in other parts of the world as well redistributing users across the world.
It is common for some bitcoin traders with significantly high deposits to try to crush the Bitcoin market by selling a very high volume of Bitcoin all at once. In the year 2014, a bitcoin trader only known as BearWhale was trying to sell about 30,000 Bitcoin at $300 each causing a lot of reactions from the Bitcoin community what his motives indicating and swinging bitcoin price downwards in return.
Applancer is an open platform for discussion on all things like Blockchain , Cryptocurrency and Ico news updates. As such, the opinions expressed in this article are the author's own and do not necessarily reflect the view of Applancer .
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