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At this point in time, there’s a good chance that everyone in the world knows about bitcoin.
Even if you don’t, you’ve probably heard countless people talking about the digital currency.
The biggest highlight of bitcoins is that they’re produced by people, and no one controls — no government, no banks; just people.
That being said, there are two questions that need to be answered — What was behind Bitcoin’s surge in price last year late 2017, and what’s causing the price to fall right now?
First off, bitcoin’s price surge was mostly as a result of new investors or recognition from the world powers that cryptocurrencies are going mainstream.
This could be the reason why its value went from $0.01 in 2010 to over $11,000 in late 2017.
It’s also good to point out that the rise of investors last year was as a result of information from bitcoin software — it indicated that there would be a limited supply of coins.
The bottom line; there’s only so much Bitcoin that will ever exist, every day less and less bitcoins are being mined, but the demand keeps increasing.
This is the biggest reason why bitcoin rose so high in 2017.
But What’s Behind Its Recent Fall?
Well, there are several different factors that come into play here, and it’s crucial to explore every one of them.
From there, we can easily pinpoint exactly what caused the crash.
Let’s dive in!
• The Fall of Bitconnect
Ever heard of Bitconnect? There’s a good chance that you came across it on various social media platforms including Facebook, YouTube, and Twitter.
Even if you didn’t, you probably had a friend or colleague who joined the website.
Essentially, Bitconnect allowed people to put their money in a “Trading Robot” that was claimed to be able to deliver better returns than the average daytrader.
That said, many people invested in the platform with hopes that the bot will heat up their bankroll in ways they never thought possible.
Unfortunately, Bitconnect shut down their website after realizing up to $3 billion worth of capital and announced that any balances on the site would be refunded in Bitconnect Tokens, a currency that had 0 value.
It’s only normal for the currency to have no value since the trading bot was no longer in existence — you won’t be wrong to call the whole concept a well-planned Ponzi scheme.
All in all, many people lost their investments leaving them with no choice but to sell off their assets.
• Massive Selling
Here’s the thing; most crypto investors are not aware of how it works, as such, the fall in value caused them to cash out even at a loss.
As you probably guessed, this panic selling caused the price to drop even further, and that’s precisely what we’re experiencing right now.
Let’s round it up with the News from China
The first news that hit hard on the market last year was that China had banned all ICO’s.
Just within one day, the cryptocurrency market lost up to $20 billion but showed some growth the very next day.
What’s more, another news from China stated that the country is planning to ban and cut off domestic access to all cryptocurrencies exchange platforms.
As you probably guessed, this news hit hard on the crypto market thus the fall in bitcoin value.
Final Word
The crypto market is volatile right now, and every news (both positive and negative) will have some impact on it.
Moreover, the market will see ups and down in the future, so we just have to keep our eyes peeled and see how things unfold.
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