BITCOIN, the most popular global cryptocurrency has recently suffered a dramatic fall in value, from $20,000 to $5,995.58. In 2017, the price of the cryptocurrency witnessed a 20-folds rise, outshining virtually every conventional investment. Its strong value and profitable market generated a lot of euphoria among dealers, thus increasing it acceptability worldwide. The recent crash in value has ignited an online frenzy and fears that the digital currency could be going obsolete. This has put to question the future of Bitcoin in the digital financial market.
Bitcoin falls below $6,000 and has lost over $200 billion of its market value in nearly two months. https://t.co/ZzqdZsTtdY
— The Wall Street Journal (@WSJ) February 6, 2018
Bitcoin had a loss of more than $50 billion from its market capitalization in January this year, which is one of its worst-performing months. Recently, the value further fell 11 percent to its lowest price since November 2017. This is an influence of the Facebook ban on cryptocurrency adverts and a crackdown on it investors by some governments.
The clampdown on bitcoin
The US regulatory agency – the Commodity Futures Trading Commission subpoenaed cryptocurrency exchange, Bitfinex last month. However, news of the subpoena didn’t reach the public until last Tuesday 30, January 2018. The summons by the regulatory agency shows that investigators cannot publicly discuss an ongoing investigation, as it could possibly lead to a sell-off of all cryptocurrencies.
Still on the clampdown on Bitcoin, the Indian minister of finance, Arun Jaitley, in his annual budget speech disparaged cryptocurrencies. He emphasized government’s commitment to discontinue such transactions and other virtual currencies in the country. He noted, “the government does not recognize cryptocurrency as legal tender or coin and will take all measures to eliminate the use of these cryptoassets in financing illegitimate activities or as part of the payments system.”
The future of bitcoin amidst a fall in value
Despite the dwindling value of the Bitcoin, it would appear the Bitcoin Blockchain doesn’t know this. This is explained by its quiet and consistent disposition in the collection, compilation and verification of transactions in its ledger. By so doing, it continuously creates new blocks every ten minutes or so. It has an uptime of 99.992044937 % since its inception in January 2009.
Nicholas Gregory, is founder and CEO of Commerce Block, a company which focuses on the promotion of decentralization in financial infrastructure on public Blockchains. He argues that Bitcoin has got a lot more to offer and no matter the present challenges, investors shall weather the storm. According to Gregory, “… Bitcoin is not dead. We saw a bigger crash in 2014. For long term bit coiners this is part of the journey. For people who bought recently during the bubble, it will hurt…this is just the beginning in its long journey. It’s still the first truly global decentralized currency.”
The bitcoin bet
Bitcoin dealers therefore remain confident despite the present free fall in the value of the cryptocurrency. Traders have placed a million dollar bet on it surpassing $50,000 (£37,400) in value by the end of 2018. Trading records from e-market start-up LedgerX, highlight that the massive money bid is an initiative of one or more unidentified traders. The terms of the agreement between LedgerX and the betters are that, if the value of Bitcoin is worth more than $50,000 on December 28, 2018, the owners of the bid will be given the right to buy 275 Bitcoins for $50,000 each.
Based on the above, attempts to clampdown on Bitcoin and get it out of the financial market may be counterproductive. This is explained by its virtual nature and it inextricability to the Blockchain technology. In addition to this are contrasting opinions about cryptocurrency from politicians, policy makers and financial regulators. It is therefore not surprising that though the value of Bitcoin is plummeting, it means nothing to the Bitcoin Blockchain.
— FastestVPN (@vpn_fastest) February 6, 2018
The Bitcoin buzz is making conservative leaders and financiers worried, and that is why they are appearing resistant to change. It’s normal that such a change must face resistance from some members of society before acceptance. Even the coming of the internet as a global innovative necessity for information sharing was resisted by bureaucrats who never accepted it then. Consequently, clamping down on Bitcoin, leading to a sharp fall in its value may just be a joke.