The price of the cryptocurrency has plummeted—and the regulators are growing ever more hostileby Paul Wallace / February 8, 2018 / Leave a comment
It looked like a bubble and it turns out to have been a bubble. After soaring from around $1,000 at the start of 2017 to over $19,000 in mid-December the price of a bitcoin plummeted to a low of just under $6,000 earlier this week—inflicting losses of two-thirds on those who bought the digital currency at its peak. How and why has this reverse happened and what does it mean for bitcoin’s future?
The collapse in the bitcoin price has put paid to the bullish arguments about why the cryptocurrency, so called because cryptography is used to secure and verify transactions while shielding the identity of users, could carry on appreciating.
Bitcoin was founded on the innovative blockchain technology, in which shared digital ledgers are created that allow peer-to-peer transactions without any intermediary. For its enthusiasts, the new decentralised digital currency was the way of the future, sweeping away the need for banks and central banks. It was destined to become a form of digital gold since only 21m bitcoins could ever be created. Of these nearly 17m had already been “mined” by computers that crunch data to solve increasingly laborious mathematical puzzles rather than machines that crush ores.