After the record-breaking value of the Bitcoin of over $19.000, it tumbled rapidly to about $6.000 in less than 2 months. Why did this happen?
There are many factors which caused the fall of the Bitcoin, but the biggest of them were: the banning of anonymous trading in South Korea, the speculations that UK government will introduce similar actions, US government concern that big part of the Bitcoins is used by criminals, China’s plans to block access to international cryptocurrency exchanges etc.
The General Manager of the Bank for International Settlements, Agustin Carstens said in an interview that the Bitcoin has 3 major flaws: Debasement, trust, and inefficiency. Debasement because of the forks which creates endless versions of the Bitcoin and inflates its value artificially. The trust because of the cyber attacks which resulted in millions of dollars in bitcoins stolen. Also, he said that Bitcoin has the tendency to create bubbles and it is risky to work with it because it is very unstable.
Beside the huge fall in the last days, the Bitcoin seems to be stabilized in the last few days at around $8.000 but still remains very volatile. Short term predictions are that Bitcoin will remain unstable with a possibility of loosing its value up to 20% from current value. The good news is that long term indicators show that there is high probability that the bitcoin will bounce back and its value will rise above $9000 in the next mounts.