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Bitcoin Price Drop and Problems Ahead


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Well, it looks as though the unstoppable virtual currency has just peaked. After reaching amounts over $1,200 Bitcoin price drop down to $870 by mid-day on Thursday. If that wasn’t enough, China’s central bank also announced regulations forbidding banks from handling Bitcoin transactions early Thursday morning. On the other hand, certain representatives from Bank of America have gone on record stating Bitcoin’s growth potential. The start to the holiday shopping season has also seen a surge in Bitcoin transactions. With all of this being said, it can be difficult to predict the fate of this anonymous virtual currency. As the Bitcoin price drop will there be more problems ahead? Or will Bitcoin find commercial success?

Photo credit to: TheGuardian.com

Photo credit to: TheGuardian.com

What Made Bitcoin Price Drop

What seems to be on the heels of Bitcoin’s record breaking price and transaction amounts were some shocking and disappointing news from China early Thursday morning. They announced that being they didn’t recognize Bitcoin as an actual form of currency, financial institutions were forbidden from handling any transaction including the virtual currency. Here in the US Bitcoin has been a constant topic of discussion as many parties on both sides advocate it’s potential and risk. Still, that hasn’t prohibited Bitcoin from getting a foothold in our economy, especially now that the e-commerce platform Shopify accepts Bitcoin. I call the announcement from China somewhat shocking because of the past few weeks. Their actions today don’t seem to line up with their recent awareness campaigns for Bitcoin. Following their announcement Bitcoin price drop by 30% bringing their rise to an end. Still, Bitcoin has never been known for having steady fluctuations, it’s always been a volatile currency. It will be interesting to see if it will start to rise again.

Bitcoin Price Drops but may Have Potential?

Another piece of news to accompany the recent admiration for the decentralized currency was what certain Bank of America representatives stated. They feel that virtual currency itself are an untapped market full of potential. While there are still quite a few variables that need to be worked out with this currency, especially with their being so many variations available (Bitcoin isn’t the only one out there), regulation does have to be implemented. Time will tell though if regulation is indeed in Bitcoin’s future or if we will just continue to see Bitcoin price drop further and further.

Good News Even With the Bitcoin Price Drop

On a positive note, 2013 was definitely a good year overall for Bitcoin, so far that is. Not only did the Bitcoin price hit all-time high, but so did the amount of transactions. This in large part is due to Shopify’s recent Bitcoin integration. To give you an idea, one of the metrics companies that tracks the virtual currency’s data figured out that over 80,000 Bitcoin transactions are occurring daily, which equate to approximately $257 million. That’s about a third of the amount of transactions that PayPal does, but still that’s not a bad position to be in as a virtual currency still gaining it’s foothold!

So with both sides of the scale still wavering back and forth, it can be difficult to predict what could be next for the virtual currency. I think that it ultimately comes down to if the US plans on regulating the currency. At this point it may not be the worst idea, especially with the amount of traction the anonymous currency is gaining in the e-commerce industry. Hopefully more insight into China’s reasoning comes out as well so we can get an idea what their plans are for Bitcoin’s future. I know at this point all of it’s supporters are hoping that Bitcoin price drop isn’t the start of it’s demise!

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