Is bitcoin going to the dogs? It sure seems that way. Don’t believe it? Then take one look at the price trend and you don’t have to go any further. Bitcoin pries have experienced a huge crash, falling down by over $40 in 24 hours.
What caused the prices to crash? While people are trying to figure it out, there are multiple theories going around. One of them points out the recent sale of 20,000 bitcoins by Bitfinex as the reason for price crash. While there are other who blame the price crash on the latest bitcoin fork. The price volatility saw prices falling as low as $215 only to recover a bit, reaching $232 (at the time of writing this article).
The bitcoin price crash comes right at the time when things were looking good for this widely used digital currency. Bitcoin was having a close to stable run for a couple of months now, getting everyone’s expectations up high. There were few concerns raised about the legitimacy of bitcoin flash sale on Bitfinex. It was later cleared after the exchange released a statement saying that all the orders it processed were legitimate sale orders and positions were margin called. It also stated that lenders were not affected by this flash sale. It is not the first time Bitfinex is blamed for destabilizing bitcoin prices. Even last year in August, Bitfinex and BTC-e were blamed for a 10 percent price drop.
With regard to bitcoin fork, the chief scientist of Bitcoin Foundation Gavin Andresen and Bitcoin developer Mike Hearn believe that it is very important if bitcoin has to continue growing at the current scale. Bitcoin XT, introduced by the duo will be using 8 MB blocks instead of 1 MB blocks that are currently being used. At the current rate of growth, the existing blockchain is slated to become obsolete by 2017 unless changes similar to Bitcoin XT is made. However, the Chinese bitcoin miners seem to be resisting the incorporation of Bitcoin XT.
I see, I think and I do… passionate about digital currency, start-ups and social good. I believe that if you mix them right, you can change the world. Find me @gautham_n on twitter or /gautham,nm on facebook
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