Bitcoin Price Drops
by Helga Danova | Apr 26, 2015 | Crypto News
Bitcoin is known to be extremely volatile as a currency. During its existence, its price has seen rises and falls of extreme significance. While the bears may be taking advantage from the negative trends, bulls, along with Bitcoin enthusiasts, tend to wish for the times when the price flies high again. An earlier article on Bitcoin price history has somewhat covered the major price turns. In the current one, we shall expand on the price drops between 2011 and the present.
Despite the fact that Bitcoin’s market price is an unpredictable thing, there are always logical explanations behind its behaviour. If you take a look at the market price chart and perform a brief analysis of the news in the particular time periods when either peaks or lows occurred, you will see what events can be held responsible for those.
In the year 2010, Bitcoin was a baby currency. Its starting price was a mere naught, which, howewas After reaching slightly over $30 in summer 2011, the price have dropped to $2 later in November. Although there was some sort of the infrastructure around the currency — with MtGox being the leading exchange, low security was the reason for a series of hacks and thefts which started in summer 2011. Thus, after the first ‘big bubble’, the trust in the currency started to decline, and so did the price.
August 2012: from $15.25 to $7.50. It was allegedly caused by a shutdown of some project called Bitcoin Savings & Trust led by pirateat40. The whole affair has took $400-500k of people’s Bitcoin savings. Also, somewhere around that time, the ill-famed MtGox experienced attacks.
March 2013: “A bug in the Bitcoin software [disagreement between the network participants, a fork] on March 11 caused the price to fall from $48 to $36.50 in a matter of minutes. Once it became clear that the situation was under control, the currency rebounded to near its previous highs.”
In April, Cyprus bailout was all over the news. The pessimistic trends in the world’s economy, followed another DDoS attack on MtGox servers have worked together against Bitcoin, which resulted in its price falling down to $130 on April 10th from the earlier high of around $260. The drop seemed definite for some. Thus, there was a Forbes prediction, which now seems to funny to read, where the author Timothy B. Lee has expressed his doubts that the price of Bitcoin would not go back to $260 until 2015, if ever.
In November, the price reached its all-time high of $1,151. On the global scene, the cryptocurrency was noticed and paid attention to. US Senate held a hearing on Bitcoin, and Chinese government approved the use of it by people. In December 2013, however, the bubble burst — the market price fell down to $839 at nearly the same time when the People’s Bank of China denied Bitcoin to be a currency and imposed a ban on it.
The price decreased significantly from over $900 in the beginning of the year to less than $600 with the technical problems at MtGox related to money withdrawals. At the same time, several other major exchanges, namely BitStamp and BTC-e, faced a series of DDoS attacks, which was another brick in the wall of growing security concerns. Later in the end of February, the Bitcoin price fell down to $550, resulted by MtGox major hack and its subsequent shutdown. It is estimated that the sinking ship took around 744,000 of people’s Bitcoins with it.
Up to April, the price continues going down (to $450) – the trend was strengthened by the news of the Chinese Bitcoin ban late in the previous year, which meant that Chinese banks were forced to close accounts that were in any way related to Bitcoin. Besides, IRS declared Bitcoin a taxable property, which cooled down the enthusiasm of somewhat anarchistic cryptocurrency users.
In October, a trader placed an order of 30,000 BTC at price $300 each. The event was dubbed “BearWhale” by the community, as it hit the currency’s market price hard with its massiveness.
By December, the price continued to decrease to $310 per coin.
The year started with a series of various news including a Bitstamp hack, where the loss was approximately $5 million.
This, combined with the post-Christmas period (the decline in the number of Bitcoin transactions) and the high hashing difficulty making it impossible to profit when mining bitcoins, has all led to a sudden drop in price to $177 on January 14th.
The latest significant price drop occurred quite recently, on 20th-21st April, when it reached the low of $216, still above the year’s low. Supposedly, the news of MtGox inevitably going bankrupt way back in 2012 (long before the final shutdown) has shaken the Bitcoin market a little bit. Still, at the moment of writing, the price is holding at the point of $233, which seems this year’s average price so far. There are numerous speculations about the future possible value of the currency — it will either test the bottom or respond to the (inevitably) upcoming news of acceptance, investments, and tolerance toward the currency by governments, to make an upward move again.
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