Digital Trend & Solutions

The bitcoin collapses, no (need to) panic

The sharp drop of the Bitcoin, caused by the central bank of China’s ICO, was to be expected after the constant growth of the last months: fluctuations are normal for a virtual currency also as a result of financial speculation. No need to panic, though, it is premature to talk about ‘crash’ or ‘end of bubble’, fluctuations will continue over upcoming months.

The summer was filled with news of the Bitcoin’s growth. The rapid growth of the last three months had led the bitcoin to more than double its value: from 1,400 euros of 4 months ago to 3,900 euros today, also exceeding the 4,100 euro mark. But over the last few days it registered a setback, losing 10% of its value: from 4,170 euros on the 1st of September to 3,760 euros on the 4th, and then slowly rising again. An even greater setback has been registered in the North American market, a drop from 5,000 to 4,000 dollars, with a 20% loss. In this period other cryptocurrencies have also dropped in value.

This time it has nothing to do with a decision of the Chinese Central Bank, which defined the bitcoin Ico (initial coin offering) to collect funds illegal and ordered to stop all collection activities. Since the inception of the cryptocurrency, regulators worldwide have always frowned upon it and regarded it with suspicion and though there have been periodic indications of openness, there is deep concern and strong attention on the difficulty of regulating what can’t be regulated.

Bitcoin is still a particularly attractive investment, though high risk: it is possible to make or lose a lot of money. We expect fluctuations to continue over upcoming months. The strong attention of the media could initially lead to even greater risks of speculation on the currency and opportunist behaviour by players that can gain from fluctuations.

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