Is the Bitcoin Bubble About to Burst?
By infohub — Jan 29th, 2018
Most people are of the belief that bitcoin the next big currency that the world will use. There's already a lot of hype about cryptocurrency and the underlying blockchain technology, with many media and financial experts calling the recent bitcoin price surge to $20,000 a bubble. The real question that people are facing today is will this bubble burst anytime soon. Well, there's no answer to this question.
Is the price dip an indication of a crash?
Bitcoin, after the remarkable surge, is perhaps in the shackles of a breakdown, with prices dipping from a record-breaking high of $20,000 to $13,000. This slump in bitcoin prices had rippling effects on investors, who fear that bitcoin is about to crash.
But the dip in bitcoin prices cannot be attributed to a single reason. The increasing prominence of Bitcoin Cash could be one of the reasons because it's introduction allows novice investors to take chances. But whether the fall in bitcoin prices would burst the bubble or not is still unsure.
Even if the bitcoin bubble popped, some think that there would be limited harm. Investors in the domain are increasing day by day, and the estimated $366.8 billion bitcoin market is comprised of affluent bigshots. The bubble burst is less likely to affect these investors, but it is certainly likely to cause some collateral damage. Let's see how.
A sharp fall in bitcoin prices may stress exchanges who convert bitcoins to currencies like pounds and dollars. A large group of bitcoin owners will try to cash out before there's further decrease in bitcoin value. The lack of liquidity in exchanges can further aggravate the issue and leave behind a few stains on the domain. If the bitcoin bubble pops, many exchanges and wallet service providers will be out of business.
Will the bubble-burst lead to more regulations?
No matter what the reason maybe, the bitcoin bubble may burst. Irrespective of it's severity, it could lead to one possible change-- introduction of more regulations. As more and more number of people and investors are joining the bitcoin craze, financial institutions around the globe are likely to adopt more interventionist approach to controlling the market.
Giving the fluctuations in the bitcoin market, it can't be clearly said whether the bitcoin bubble has popped or about to pop. But if the bubble pops, people might have to look for an alternative digital currency, although bitcoin won't vanish completely but go back to crypto-enthusiasts and libertarians, who gave birth to bitcoin in the first place.