Bitcoin has always been a pretty volatile currency, or commodity – depending on how you look at it. While it remained practically valueless for years, it eventually ended up peaking at over $1,200 per coin in late 2013. Since then it’s crashed and risen several times, for the most part steadily declining but holding relatively steady. Lately though, during the busiest period in the currency’s history, it crashed to $177 per coin, marking the lowest point of the currency in years. Now however, it looks to be recovering.
With all of the new sites and services accepting the currency and all of the people using it – more than ever right now – why is the price going down? TechCrunch speculates that it could be to do with bitcoin miners, who’s actions have often had a big effect on the pricing of Bitcoin at the big exchanges. It speculates that due to the diminishing returns of mining – increased cost for hardware and electricity to ‘mine’ them as the process becomes harder to limit the maximum number of coins – those running the server farms behind it all could be dumping the currency at cut rates as soon as they can. As the price began to fall, this may have happened more and more as organisations want to minimise their potential losses by selling quickly.
A year of bitcoin value, courtesy of Blockchain
Of course this won’t kill bitcoin, or even affect many of the big exchanges as the currency is now used enough that it’s a legitimate method of purchasing online – albeit a niche one. Whether coins are worth $10 or $1,000, the fact that people can trade in fractions of them makes it perfectly viable at almost any value. On top of that, it’s already rebounding and at the time of writing is $214 per coin.
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KitGuru Says: Hopefully none of you lost too much money in the recent value dip?