The decline in the Bitcoin price brought with it fear, speculation and an opportunity for miners and investors alike. The temporary and tiny Bitcoin price crash enticed new investors to come into the market while the price was down. The Paypal announcement offers a quick return – it should be noted that the Bitcoin trading exchanges are not regulated and insider trading can easily occur. All we know for sure is that large sums of Bitcoin were bought on open exchanges. It is entirely possible that whales seized this opportunity to eat into sell walls and cause the Bitcoin price to surge.
Perhaps the news shouldn’t have come as such a shock to the community as it was months in the making. John Donahoe, the president and CEO of Ebay, made comments as far back as June saying they would have to integrate digital currencies. There was even an attempt made by Paypal to steal Apple’s thunder with a video release on youtube. The video hinted at new PayPal functionality for merchants and customers alike that would allow quick and seamless transactions of all sorts. Yes, Bitcoin was explicitly mentioned. If these weren’t signs enough for the Bitcoin community, just two weeks ago, Paypal announced Bitcoin integration through Braintree.
Maybe the community missed the memo, but the signs were clear, Paypal is going to accept Bitcoin as a viable payment method. Their steps are cautious and slow, but they are making progress in the right direction.
One group that might not be happy with the increase in price are corporate bitcoin miners. The decline in price effects small level miners the most because smaller home miners work with smaller margins. As the price declines, small time miners are forced out of business because they are unable to produce positive returns. Thankfully, the price has rebounded and given these miners the ability to stay in the game. The fear here is that the network could eventually be controlled by a select few business rather than millions of miners – one could argue this is the antithesis of Bitcoin.
Right now the price of Bitcoin has ADD – if nothing is happening it tends to wander in a downward spiral due to selling pressure from merchants and miners, but (sometimes) as soon as positive news is released we seem to see an upsurge in price and volume. This isn’t necessarily a bad thing: It shows that there is real interest in Bitcoin and its moving forward – progression vs stagnation. I look forward to seeing Bitcoin move its focus from merchants to customer and more towards business to business transactions. The market is reacting because PayPal has just helped Bitcoin in this journey.
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Last modified: September 24, 2014 09:54 UTC