After hitting an all-time high of $20,000 just days ago, Bitcoin has now dropped with almost one third of its value, now trading at around $13,000. After reaching a peak last Sunday, investors are now taking a “cold shower” with the decreasing price of the digital currency.
There are several reasons why that might be happening right now. One is the growing popularity of Bitcoin Cash, the derivative of Bitcoin that was born after one of the hard forks of the “people’s currency”. The price of Bitcoin Cash is rising, while the price of its “parent” – decreasing constantly these several days.
What is more, after the launch of Bitcoin Cash on Coinbase, one of the largest cryptocurrency exchanges, Bitcoin’s price plunged with 10% and hit $17,000 by the middle of this week.
Another reason might be the tightening regulations of international banks on payments and transfers to cryptocurrency exchanges. For example, in Bulgaria, several banks have already banned the transfers to Coinbase, stating that these are “unregulated”.
However, as Bitcoin is a volatile currency, ups and downs in the price are not something unusual. So, what can happen, analysts say, is that we can see Bitcoin trading again at around $20,000 very soon. With the predictions of investors like Mike Novogratz and the Winklevoss brothers that the price of Bitcoin may hit $100,000 in the near future, a correction of 30% may not seem a huge bump to the bulls.
In relation to the price drop this week, some remember the price drop in September, when Bitcoin was trading for around $5,000 and then crashed to just $3,000.