The Bitcoin price has slumped again, dropping to just above $570 in what could be part of another extended bear run.
Also read: The Wealthiest Serving Congressman Just Bought His First Bitcoin
It’s a far cry from just a two months ago, which saw cheers of “to the moon!” as the bitcoin price reached $772 on June 16. It crashed to $593 on June 22 before recovering back to $707 by July 2, and has been mostly in decline since.
It should be noted that the price is still higher than August 2, when it suddenly crashed to $535 upon news of the Bitfinex hack. The rebound from that low has been weak, succumbing once again to gravity.
What’s Happening to the Bitcoin Price?
One glaringly obvious reason for the drama is the hack on one of Bitcoin’s most popular exchanges, Bitfinex. The $70 million theft is the largest in the Bitcoin world since Mt Gox, which caused price chaos on a grander scale in 2014.
Such a news event hauls Bitcoin back into the mainstream media spotlight and, given the media’s tendency to report mainly negative news, reinforces the unfortunate public notion that Bitcoin is a wild west at best, and unstable at worst.
Bitfinex’s response to the crisis has come under fire from many within the community too, socializing losses of around 36 percent across all accounts and offering a form of IOU to its customers who wonder whether any company could recover from such a disaster. Some also protested that their non-bitcoin account values had been tapped to even out losses.
Sucking up the Oxygen (and Money)
Another factor in bitcoin’s broader price decline could be the amount of news coming from the world of altcoins as of late. Once a fringe sideshow that most outside the cryptocurrency world didn’t even know existed, altcoins have seen their own share of drama and price surges that may be sucking the oxygen (and money) out of bitcoin.
The Ethereum/DAO/hard-fork/Classic saga may be getting old now, but the prices of both rival currencies have seesawed without either crashing to the floor. ETH has held at around $11 while ETC is knocking at the $2 door once again.
Even more has happened this past week. Privacy-focused currency DASH has soared to over $15 from around $9 at the start of August, while distributed computing-based MaidSafeCoin this week saw another surge that surpassed its last rally in March, pushing $0.15 (about double its value from the start of the month).
The much-hyped Steem currency of social media economy Steemit.com pushed into the Top 10 on Coincap.io but has declined since its initial July surge, and is probably not taking any money out of Bitcoin this week.
Bitcoin Has to Compete
The bottom line is that altcoins can no longer be considered copycats or reinventions of the same cryptocurrency wheel. Many of them represent compelling use cases beyond just payments and – whether long-term feasible or not – are dead serious about chasing investment capital.
Bitcoin can no longer take for granted that its first-mover advantage will keep most money and attention flowing towards it. While it would be ridiculous to say any other cryptocurrency or appcoin could supplant Bitcoin any time soon, complacency could cause a gradual decline.
If Bitcoin is no longer seen to be innovative or even progressing, it could be hard to keep the attention of an industry with notoriously short spans and a constant hunger for the new.
However, it’s also important to remember a week in cryptocurrency is like a year in the rest of the financial world. By this time next week, we could be reporting on Bitcoin’s latest bout of world dominance (hopefully).
Are you taking the opportunity to buy Bitcoin, or cutting your losses to invest in something else? Is this anything to worry about at all?
Cover image courtesy of UT News.
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