The currency, Bitcoin, reached a record high back in December at
$19,511, but it now has spiraled down and lost half its value, hitting their all time
low for the year this week. This is due to a variety of factors, such as increased
regulations and questions regarding its viability. Government oversight is
expected to increase and there are fears that the price can be easily manipulated
due to hacking. Facebook even banned advertisements for cryptocurrency this
week. India and Japan have already cracked down on cryptocurrencies through
their own national regulations. Bitcoin grew by 1,400 percent last year, becoming
a 200 billion dollar market, yet its recent fall is a big red flag for its future in our
country, as growing skepticism and law enforcement could put a permanent halt
to its growth. My suggestion is if you are a current investor in Bitcoin it might be
time to sell.
https://www.bloomberg.com/news/articles/2018-02-01/bitcoin-extends-record-january-slide-as-concerns-increase
6 comments:
I think selling now would be a good idea too. The Winklevoss twins lost millions because of the drastic drop in bitcoin. I also saw a service online in which you can order pizzas with bitcoin. The man wound up paying $65 for the pizza because it is so hard to adjust quickly to the frequent changes in prices.
I agree with you completely Joelle, I think increased regulations will halt bitcoin's growth in the future.
Increased regulations may slow future growth, relative to Bitcoin's performance in 2017; but I think it's too early to sell for current coin holders. Current investors may want to consider averaging down in opposition to selling off shares at this time.
Although bitcoin plummeted I think it will rise back up, steadily. With new innovations such as the Lightening network- a secure payment network for bitcoin comes in the network it should prevent hackers. As for government regulation, it is too early to say how crypto currency will react. If anything, maybe regulation gives bitcoin the price stability it needs to counter the volatility that its infamous for.
One other reason that the article does not talk about but is something important about cryptocurrencies, is that they are not backed up, like the currencies that are issued by governments, and this makes them be more volatile because people don't have as much trust that the prices are not going to change.. Since many people have invested in Bitcoin without really knowing how it works, but because everyone is doing it and is a trend, this causes that when the price starts dropping many people can get scared and start selling. This could be another reason why the price is dropping so quickly, because when people that don't know much about Bitcoin buy it and the price decreases they will immediately sell and not keep them to wait for the price to go back up, If people had more information about bitcoin and how it works the price wouldn't be as volatile.
Bitcoin is one of the cryptocurrencies. It has fixed and limited amount, so ideally it wouldn't cause serious inflation. Cryptocurrencies, however, are largely depended on countries' policies. If one country totally bans them, they would be considered as zero value to the citizens, which means cryptocurrencies are very policy sensitive. So, I believe that the future of Bitcoin is depended on the attitudes of large countries.
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