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Screenshot of a breaking news alert e-mail from Q2 2017
More and more businesses now accept Bitcoin. Well respected business mavericks and early adopters such as Richard Branson are getting behind Bitcoin. Bitcoin scandals such as the bankruptcy of Mt Gox seem like distant memories.
So Bitcoin prices must be moving up, right?
Despite continuing (mostly positive) press coverage surrounding digital currencies and the reasons we listed above, Bitcoin prices have been in a summer-long steady decline.
That decline culminated early this week with the first sustained trading of Bitcoins below the $400 level – the first time that has happened since Bitcoin began its steady climb in value in late 2013.
Bitcoin one year price chart. Source: Bitstamp.
With no central bank to blame for the drop in value (like for the Euro recently), reasons given for the fall in Bitcoin prices lately include:
- The strengthening of the US Dollar against most major currencies, bringing traders back to the dollar from most other value alternatives such as Gold, Oil, and also Bitcoin.
- The lack of volatility in Bitcoin compared to the wild up-and-down days of earlier this year has seen speculators slowly abandon the digital currency for other asset classes.
- China – Chinese traders, integral to Bitcoin values, are dumping Bitcoins en masse.
- The pending excitement regarding ApplePay and its expected October launch.
- PayPal’s spinoff from eBay, (NASDAQ:EBAY) and the expected increase in innovation from the company which first popularized payments outside the traditional bank industry.
It remains to be seen if this is a temporary setback for Bitcoin on its long road to respectability and general use. But if the price keeps going down, all but die-hard Bitcoin fans are unlikely to want to keep their hands on large amounts of Bitcoin given the risks still surrounding it.