Bitcoin has been at the receiving end of the bubble blame for a couple of years. Financial experts and traders have been discussing this scenario even though they did not have any such evidence in the support of their belief. It kept rising at a wild pace till December 2017 and then took a nose dive to go down to less than $7000 in March 2018. Bitcoin Price Going Down and the Reasons Behind this Downfall.
At this doom, one can think of concluding the bubble burst scenario to be true. Although the value of bitcoin has dropped down to approximately 75% of its value in only two months but the argument could be defused by the fact that it has shown the potential to rise at the same pace at the end of last year.
The Logic behind the free-fall of Bitcoin
Let me say the last thing first, it is not a bubble. The reason for this assumption is that the price drop has logic behind it. The value of each currency depends on the volume of use in form of transactions and trades.
Several regulatory bodies have put a ban on holding, mining or trading Bitcoins, however few of the bans are conditional. The unfortunate part of disowning this currency is that it has been restricted just because of its own strong points mentioned below:
Since no one can identify the owner of Bitcoin, it has given rise to its use in the Dark web and other criminal activities such as money laundering and sex trafficking. Several countries have banned the use of Bitcoin just for the reason of its anonymous nature. Pakistan has also banned crypto trading for the same reason. China has banned Initial Coin Offerings of cryptocurrency.
Bitcoin Price Going Down and the Reasons Behind this Downfall
Its highly volatile nature is one of another strong reason that people have restricted its use. It has witnessed huge uptrend and downtrend in a matter of weeks. Merchants hesitate to accept it as a legitimate payment option because of the fear that it might drop down next moment. Buyers don’t want to use it because they believe its price to be higher soon.
So in both the scenarios, high volatile nature has in fact restricted the use of Bitcoin at large which in turn results in less circulation. Even Microsoft has withdrawn its support as a valid payment option for that very reason. There was no outside reason that Microsoft disconnected them from Bitcoin.
Frauds in the Name of ICOs
On average there is one new digital currency being introduced to the market. Each cryptocurrency starts off with an Initial Coin Offerings which allows the investors to buy these coins at a lower rate with promises to get high rewards for their investment. Every new offering gives a detailed business model behind their blockchain setup.
Few of these ICOs collected the investment from traders and disappeared which triggered technology Giants like Facebook and Google to ban the advertisement for new Initial coin offerings and digital currencies. This scenario is treated against the credibility of Bitcoin which is an unfair treatment.
We have discussed few of the reasons of why Bitcoin price going down and we have come to a conclusion that Bitcoin is not a bubble that is at the verge of collapse but it is a well-established digital currency which is restricted by the traders and government bodies because of its most powerful points. These powerful points once carried the value of the coin to $20000 recently and it has the potential to do it again.