The Bitcoin price, which saw a 32% increase in value from May 20th to May 26, has slowed to a halt. On May 20th one Bitcoin was worth $444, and on May 26th one was worth $587. This volatility has not been uncommon in Bitcoin’s history; Bitcoin has seen numerous rises and falls in value. Speculations have arisen about the cause of this increase.
[dropcap size=”small”]B[/dropcap]itcoin has seen numerous rises and falls in value over short periods of time. The roller coaster value is often attributed to good or bad news. For example, the value drops when people believe that China will ban Bitcoin. However, when good news arises, Bitcoin’s value does too. As Bitcoin matures, the price will likely become more stable. While the volatility of Bitcoin can be exciting, many people will wait until Bitcoin is more stable before they begin using it.
The rise in value is ending for now. Bitcoin’s remained fairly stable over the past 24 hours, going down only 0.11% in value. I for one was hoping that the price would reach $600, but it maxed out at $585. CCN writer Venzen Khaosan thinks that the “price will reverse from current levels around $600 and may retrace at least 50% of the advance to $520”, and that “traders and investors should brace themselves for a strong price reversal.”
As usual, quite a few theories regarding the increase in value have emerged. CCN reader ‘Alakawak’ believes that it’s due to price manipulation, which is certainly possible. A top story this week was the “Willy Report“, a post on a WordPress site which shared the writer’s belief that there was some price manipulation occurring behind the scenes at MtGox, a popular Bitcoin exchange.
CCN reader Stopasking4registration proposed another interesting theory – that people are buying into Bitcoin, only to exchange their Bitcoins for altcoins that are doing well, such as Darkcoin. This creates a demand for Bitcoin, thus raising the price. Another possibility for the rise in value is the recent good news in the Bitcoin world (literally) – Bitcoin’s reaching the corners of the globe with its ATMs, the newest addition being Africa. More good news includes the fact that methods are being created to easily send and receive Bitcoins, such as QuickCoin, an application on Facebook that allows users to send Bitcoins to friends.
Bitcoin’s volatility is not uncommon. The price will likely not stay stable for long, and could either shoot up or go down, depending on a number of reasons. Good news generally increases the value; bad news does the opposite.
This is merely an analysis of the Bitcoin price. Neither CryptoCoinsNews nor Jonathan Saewitz are responsible for anything that may occur due to this analysis.
Last modified (UTC): May 28, 2014 02:21