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Bitcoin bounces back after dropping $130 in a few hours

We’ve been reporting on Bitcoin’s value explosion over the past couple of months, but for the past few days it’s been tumultuous at best. Yesterday saw the highest Bitcoin value ever, topping out at around $266 per Bitcoin, but this was the final slog in Bitcoin’s uphill sprint as it quickly tumbled all the way down to $130 in a few hours.

Since then it’s yoyo’d back and forth, returning to a still impressive $180 this morning. This doesn’t appear to be the bubble bursting that is still expected to take place, but a ‘correction’ as the unsustainable growth of Bitcoin took a little stumble. But what caused it?

bitcoindrop
Bitcoin’s near vertical value climb was never going to last.

Initially people thought it might be a DDOS attack on the Mt.Gox exchange, but that has now been refuted on the company’s Facebook page. It posted:

“Hi everyone, just a quick update on the situation and what happened last night. First of all we would like to reassure you but no we were not last night victim of a DDoS but instead victim of our own success!”

It goes on to explain that with all the news stories being posted about Bitcoins, interest in the currency has spiked. This caused a slow down of Bitcoin related services, prompting many people to assume the bubble was bursting and they began dumping Bitcoins, sending the value crashing.

However, with over 80 per cent of Bitcoins thought to be owned by a handful of people and companies, it seems none of the big players released their Bitcoins yet, as that would likely be the death knell for the currency’s current financial highs – since even a 10 per cent stake in all Bitcoins would equal out to well over $100 million.

KitGuru Says: It seems crazy to think that if you’d bought Bitcoins in January this year and sold them yesterday morning, you’d have made around 1000 per cent profit.

[Cheers TechCrunch]

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