Bitcoin, the peer-to-peer virtual currency that was created by an anonymous hacker four years ago, lost more than $160 (£104), dropping to $105 in a flash crash today before bouncing back to $130... this was just hours after the currency had hit a new high of $266. Even after such a crash, it's unlikely to put off speculators as each 'coin' in the currency's history has been worth less than $10.
Bitcoin garnered a lot of attention this year in the wake of the economic uncertainty that has occured in Europe, followed by the banking crisis in Cyprus. All of these concerns about the health of government-backed paper currencies like the euro and the U.S. dollar is what has most likely led to such a surge of speculators piling into this digital currency and causing such a 'bubble' to happen. However, it should be noted that Bitcoin crashed before in 2011 when it hit a low of $7 before hitting a high of $32 two months later.
Check this article from Forbes on more information about Bitcoins.
Well, considering it gained the last $100 in like 2 days, its not a surprise the market corrected itself.
ReplyDeleteIt's interesting nobody in the press mentions why the market crashed. Demand left the largest exchange unable to cope and the servers lagged out causing panic selling.
ReplyDeleteIt crashed due to *too much* demand.