Bitcoin Price Drops by $4,000 in a few days
During the last few weeks, the bitcoin market has been filled with volatility concerns, given its latest price surge to approximately $20,000. For those who do not know, the latest price increases can mostly be attributed to rising institutional investor interest, given the trading of bitcoin futures on a few securities exchanges.
However, an unexpected event most likely triggered by a Coinbase decision that we’ll analyse later on has brought down the prices to approximately $15,810 on a couple of exchanges, thus causing a major sell-off of coins by people throughout the world. At the time of writing, the price has mostly recovered from its latest downfall, given the fact that it is now trading at $17,268. Still, the BTC/USD pair is still trading at lower values when compared to its recent history, when the price seemed to have stabilized at the $18,500-$19,000 point.
At this moment in time, analysts are attributing the fall in price to a decision made by Coinbase, one of the world’s largest digital currency exchanges, to allow the trading of Bitcoin Cash, a spin-off of bitcoin created following a hard fork a couple of months ago.
A few hours after bitcoin cash started trading on Coinbase, the platform decided to suspend trading following a massive spike in the bitcoin cash price. Some believe that insider trading may have taken place as well, following a pre-brief on the announcement. Although this isn’t certain. The Coinbase CEO, Brian Armstrong, mentioned that: "Given the price increase in the hours leading up the announcement, we will be conducting an investigation into this matter (…) if we find evidence of any employee or contractor violating our policies — directly or indirectly — I will not hesitate to terminate the employee immediately and take appropriate legal action."
Additionally, another reason for the price decrease may have been news that a South Korean digital currency exchange will be filing for bankruptcy after it has been hacked for the second time this year. While there is no exact information on the value of the coins lost, Youbit, the exchange in question, did say that they lost 17% of their total assets.
Based on everything that has been outlined so far, while the price decrease may have caused a sell-off, it is important to point out that bitcoin has always recovered quickly. Granted its current price, it is likely that it will manage to reach and sustain values above $20,000 by the end of the year.