Bitcoin Price Plunge: Top Guesses Why Bitcoin Prices Are Falling
In December 2017, the price of Bitcoin reached a record high of $18,500. The cryptocurrency created a rage in the marketplace, catching the imagination of scores of people who perceived it a quick money making scheme.
Economists see it as a bubble which will eventually burst, leading to financial losses for those who invested in the digital currency. Nevertheless, the popularity of Bitcoin has barely seen a slump. Other cryptocurrencies have gained in the face of Bitcoin’s loss.
At the time when Bitcoin was being traded at $18,500, many predicted that the digital currency would cross the $20,000 mark as well. However, the prices tumbled down and are now hovering at $10,000 levels. On February 2, the price of Bitcoin had dipped below $9,000 levels.
This leads one to question why Bitcoin, which made news in 2017 for its high trading price, is suddenly crashing at a fast pace. To give a perspective, Bitcoin prices have fallen by approximately 38% since the start of this year. These can be one of the many reasons.
Many economists attribute the staggering rise in Bitcoin last year to euphoria. With more Bitcoin-related news hitting the market glorifying its outrageous price acceleration, it led to its prices being pushed even further. But now, many predict Bitcoin prices to go below the $8,000-$9,000 mark.
Due to the declining prices, investors are wary to buy a higher amount of Bitcoin. Last year, initial investment would go up to Rs.10 lakh. With the start of 2018, Bitcoin investors are buying a smaller amount of Bitcoin with price ranging between Rs.50,000 to Rs.1 lakh.
Many governments are putting strong restrictions in place to regulate Bitcoin trading. While some countries, like USA and Japan, have shown a positive mindset, others have moved to ban cryptocurrencies. India has joined that bandwagon too. The finance minister Arun Jaitley, in his Union Budget speech, clearly stated that Bitcoin and other cryptocurrencies won’t be considered legal tender in the country. RBI has also warned banks to not deal with firms that trade digital currencies. The same is the case of South Korea. This has led to Bitcoin prices plunging to never seen below lows.
Facebook, the leading social media platform, recently banned advertisements related to cryptocurrencies to be published on its platform. The move is aimed at stopping people from being scammed by quick money making schemes. Other companies will soon follow suit. This has, in turn, had a cascading effect on the prices of the cryptocurrency.
Bitcoin prices have witnessed a gradual increase in the last 5 to 6 years. But 2017 was exceptional since the prices saw an exponential increase, catching everybody’s attention. Needless to say, Bitcoin and other digital currency markets are in a highly volatile state. With no guarantee backing its trade, the prices are solely regulated by investors’ sentiment. One should tread with caution if he/she plans to invest in it.