Bitcoin has started its’ way almost 10 years ago, as an independent currency with no central bank regulating it. It has grown from basically $0 to an astonishing $17K, but since then we’ve seen a massive drop down to $6.5K in a course of less than a month. Was this all a pipe dream taken away by reality?
First, let’s dive into the basics of the concept. Bitcoin, regardless if it being decentralized coin, will still follow the market trends as it is influenced by the same laws: Supply and Demand. There is no fixed price of Bitcoin, it is very volatile as it is an idea that’s spreading into the conscience of the general public. The hype train has arrived with the Bitcoin name strapped in big money sign on it. It’s rare to have a day go by today, without hearing about Bitcoin from someone or from the media. As some government started backing Bitcoin, economy crashes and Bitcoin being an alternative, companies accepting it, and the currency being legitimized – people trust in the Bitcoin currency became as in any other currency.
People started thinking that this is the goose that they’ve been waiting for, and the golden eggs will start popping with B signed on them. The general public doesn’t take into consideration fluctuation, and go in blindly along with everyone, expecting to make a quick buck. It wasn’t long until some of the Bitcoin’s downsides showed – long transaction times, hacks and frauds has been made with the coin as so many people hardly understand the idea behind the network. As markets usually go, smart investors started realizing their profit, which creates a big supply; All of a sudden, instead of the price going up, there’s more competition, so the price goes down a little. When the price dropped a little, more investors decided that it’s time to take some of their funds to other areas, which caused the prices to drop even more. That’s when the panic set in. All of those people, who decided to go in without proper planning, started seeing their money disappear, decide to get out quick before it’s too late, and keep spiraling the price down.
See you in the next post,
Dekel
Than you for this information.