The volatile nature of bitcoins took its toll as recent turn of events saw the value plunging down to $274 as of this writing. CoinDesk Bitcoin Price Index reported that while it opened to $314.59 last Saturday, it was followed by a staggering $263.63 the next day.
The remarkable price drop got everyone talking and while it instigated worries among market watchers, some focused on its bright side, deeming it the perfect opportunity for buying. However, the question still lies out in the open unanswered. What caused the steep crash?
Theories suggest that it may have something to do with margin calls, which if accurate, already did something of this nature sometime in August last year. The holiday season is another factor that may have had affected the value of bitcoins inadvertently. This was the season where exchanges were few with all the banks closed, disabling traders from filling up their cryptocurrency accounts.
Despite not having any accurate explanation as to what caused the bitcoins’ price to go down, the fact that it is sensitive to various factors traders are yet to fully comprehend, makes the future of bitcoins somehow ambiguous. Some traders even think that this will not be the lowest value yet; the price has further to decline. Being said that, will this affect its overall value and functions?
The fact that the number of communities, states and countries warming up to the idea of using bitcoins for basic transactions continues to increase is good news. California, for instance, known for being Bitcoin-friendly, further proves its aptitude to move forward with an open mind by legalizing the use of bitcoins in the state. Though there is a bit of disclaimer here and there as establishments are not legally obliged to incorporate cryptocurrencies in their system; still, it is a remarkable leap in Bitcoin’s journey for mainstream acceptance.
Generally, the potential of altcoins to do more than what it is originally for is a huge possibility. Bitcoins have done it, so it is natural for the rest to follow. However, with the price of Bitcoin going down for no precise reasons, there becomes a fine line between its potential and risks; something that it also shares with other altcoins.
If the definition, functions and purpose of altcoins can be laid out in the open with nothing but pure positive agenda, the essence of cryptocurrency will be fully understood and cemented into being an effective and useful alternative currency that it is, and maybe there is a greater chance of ensuring its longevity in the market.