Last December, when the bitcoin price rose from 10,000 to nearly $ 20,000 in just over two weeks, users were not only excited. There was a state of restlessness on the market that you could cut with the knife. Most of us were continually watching, wondering “should I invest in Bitcoin Code” and what are the mining costs (production) of bitcoin. At that time there were somewhere at 3000 dollars. The value of “retail” seemed absurd even for enthusiasts.
Why the BTC price dropped – An analysis
Meanwhile, the bitcoin price has fallen back to October-November and users are still restless. Why did the price drop? Several apparent factors have led to a lowering of the bitcoin price and some systemic problems that need to be resolved before the price picks up. So let’s see why the bitcoin price has fallen since December and so far.
Several states promise cryptomonads regulation
The greatest fear of the bitcoin investors remains regulations. It goes without saying that the authorities want to take an attitude to some critical problems that cryptomonads have brought. ICOs have harmed the most naive investors. Even if the development coming from this area is precious, the balance of advantages and disadvantages in the eyes of the financial authorities is unbalanced. There are suspicions that digital coins are used for money laundering, terrorist financing, and illegal activities.
It is hard to contradict the allegations when large exchanges – most recently the Coincheck case and theft of NEM files – are losing users’ money and no longer recovering or tracking them. We are talking here about experienced programmers in the new blockchain. Are cryptomonads secure or not? If so, how is it that even the most experienced coders have trouble securing the funds? With regard to ICOs, the media says there is sort of “paradise” in Malta, Gibraltar, and Estonia. In fact, it’s not that way.
Authorities are looking to impose some regulations; we hope reasonable. Users have no confidence in the system, nor the desire to surrender the power. On the other hand, the institutional money that pumped the price in December is waiting cautiously to see what results the authorities are getting.
Is it a temporary problem? Yes. The dice are in the air, and we’ll see the figure we give. For now, communications are optimistic. In South Korea, America, and international congresses, a cautious approach is sought that does not hinder innovation. Curiosity is whether the price will be put on trading, or the “nationalization” of technology will be attempted. See more here.
Scalability issues
As the bitcoin experiment advances, problems emerge. From the very beginning, we have had this kind of “code,” governance, or technology issues. It was expected. Indeed, scalability, the fact that the network is overloaded and unable to process more than seven transactions per second, is among the most severe issues.
Confidence in the code is – and should be – the most critical factor influencing the bitcoin price. The wicked problem of scalability affects everyday aspects of using bitcoin. How many employers are willing to pay wages in bitcoin, when commissions reach $ 50? Steam pulled the bitcoin out of the pay grid for the same reason.
The community and the loyalists have pivoted – they say that the currency is not precisely a payment currency, it is an asset of stocking values. They’re not realistic. The functional protocol gives Bitcoin value. What cost do we have if the code shows signs of premature aging? Yes, the commissions have fallen in the meantime, but that’s mostly because the traffic on the blockchain has dropped.
Is it a temporary problem? We’d better keep our fists tight. The reality is that developers are working on solving the problem in the long run. From the Ethereum developer community, one of the most active blockchain coder communities, the most viable signs were seen. For the bitcoin, the signals are still weak. We have the Lightning Network at work.
Visit this website: https://news.bitcoin.com/
Market Emotionality – Beginners Against Advanced
Why the bitcoin price has fallen – It is known that the bitcoin market is primarily emotional. FUD (fear, uncertainty, and doubt) are spreading rapidly and devastatingly. Enthusiasm spreads in evangelical spirit. The mainstream media does not lack oblivion at this time. On the market, however, there is a struggle between advanced and novice, between whales and plankton, and between institutional and small money.
The unrealistic flow of newcomers to the community
The basic rule when doing trading is to buy cheap and sell expensive. On the crypto market, I have often seen the reverse. New-entrants to the market usually learn from bitcoin news when the price is on the wave. FOMO – the fear of losing the opportunity or the fear of missing out makes them buy fast without considering price fluctuations.
The beginnings of the bitcoin were dominated by “loyalists,” people involved in the ecosystem who have an ideology behind. Each wave of growth has brought with it some more or less loyal speculators looking for investments, no matter what those are. If the loyalists keep the price, the newcomers are ready to liquidate at the slightest sign that the market. It’s called slamming – in the absence of a better word. That’s how the corrections are. Some investors are “burning” because they do not understand these fluctuations. Some of them will never return to the market too soon. The problem is that anyone can invest in bitcoin and cryptomonads. The market is open to the least experienced, and even newbies. Is it a temporary issue? Yes, as every time we have had a wave and a correction created by the currents of the market.
What can we do in this sense? Probably continue to educate beginners on all channels with real information. They do not need to sell “fast-paced” dreams and “the market goes up.” Perhaps the risks should be the first to understand. People need to understand the essential motto of bitcoin trading – Never invest more than you can afford to lose.
Future Markets and Traditional Investors with “Excessive Experience”
We have, on the one hand, the waves created by the inexperienced investors, but we can not forget that in December the so-called institutional money of the experienced investors came into the market. Bitcoin price rose in two installments, from $ 2,000 to $ 4,000 and from $ 4,000 to $ 8,000 due to summer bifurcations. Afterward, the price has increased due to the introduction of future contracts to two of the major North American operators.
A problem that has been discussed since then by analysts was that once these new whales entered, the rules of the game could change. In the future market, these experienced traders can also gain from falling prices, just as they can win from rises. In January, many short positions were opened. It is not clear how much the future markets have on the bitcoin price, but undoubtedly a downward cut was caused by this. In any case, this category is now more on the sidelines, pending the regulations, as I said earlier. When getting into the business, you have to take all the risks.
