Bitcoin prices have surged significantly in the past few months. But more recently the push that the currency was seeing has somewhat vanished. Since it made an all-time high of $42,000 and fell down, the prices never got back there again. It has constantly been trading between $30,000 and $40,000 and even went below that a few times. During January the currency went through a crisis but did recover and now it is going through the same situation again.
Bitcoin prices dropping
The currency saw a drop of about 12% in September 2020, and this week the prices of the currency have already dropped 11%. Bitcoin prices went as low as $28,800 this week after the latest session. Concerns regarding the currency has been one of the main factors for this price fall. Plus, the most recent development in the US government has also been a major issue. Reports suggest that the US secratariat commented against the Bitcoin. This is because the crytpocurrency is being used in a lot of illegal activities.
Now coming to the double spend bug, reports suggest that Bitcoin double spend bug surfaced. This bug allowed users to spend the same bitcoin twice. A tweet regarding the same dropped the prices of the currency by a lot. But later it was found that no such bug actually exists and it was actually a misunderstanding. This all has already sparked a negative motion in the already downhill market of Bitcoin.
Even though major investors are still being very optimistic about Bitcoin, it is difficult to say how long this optimism will last. The fact that Bitcoin is a extremly volatile asset, it is viewed more as a medium to make money, then actually being something you can buy and forget about. If negative news around the currency don’t stop then it is plausible that we might see a collapse that will be reminiscent of the 2018 downfall of the currency.
Analysis given by JP Morgan
A recent analysis by JP Morgan suggested that if the prices of Bitcoin don’t cross $40,000 again, the price of the currency may crash catastrophically. And for that to happen the curreny needs to undergo atleast $100 million in transactions daily. Plus, the demand of the currency has also dropped significantly since it saw major swings in the negative side of the market. This has resulted in retail investors resorting to selling the currency. At the same time big firms are also reconsidering their decision in investing half of the company’s fund in it.
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