Bitcoin price falls as the Bitcoin cryptocurrency is heading for a bad week its worst week since April 2013. Bitcoin has fallen 30% over the past week, dropping below $7,910 Friday on the Bitstamp exchange. This is 12% below Thursday’s price. However, it has recovered slightly but only slightly! Bitcoins are like any other traded item its value depends on market demand and how much people are will to buy them for a sell them for.
Bitcoin Price Well Below November Price
The Bitcoin price is still way below the $19,000 of November last year, although is nowhere near the $1,000 that was the starting price when it began trading. This news may not be surprising to many people due to a number of incidents recently that were sure to affect cryptocurrencies across the board.
Last week, Coincheck, the major Japanese bitcoin exchange, was subject to a security hack that resulted in the theft of $530 million of digital currency. Japan’s financial regular carried out a surprise check on the exchange on Friday. Apparently, the regulator had previously requested that Coincheck repair flaws in its computer networks well before the hack took place.
Facebook Bans Digital Currencies
Another issue was Facebook’s announcement that adverts for digital currencies would be banned on the social network site. It’s not only Facebook that is concerned about the rising popularity of digital currencies. The launch of new cryptocurrencies, or virtual currencies since hard forms of the currencies do not exist, have also been banned in South Korea and China. The countries have shut down any exchanges on which they have been traded.
About Bitcoin Mining Maximum and Blockchains
Back in September last year, the UK Financial Conduct Authority had warned customers that all their investment could be lost if they purchased initial coin offerings (ICOs) of digital currencies, also known as cryptocurrencies.
Bitcoins are created by ‘mining’ a complex series of puzzles solved by a computer that generates new Bitcoins up to a certain maximum that maximum is still well below Thursday’s price. This may be just a hiccup in the development of cryptocurrencies, digital currencies or virtual currencies, whichever term you choose to use.
Each transaction is known as a ‘block’, and these blocks are chained together to form a blockchain which contains the history of the virtual currency. Every transaction using a cryptocurrency can be identified from the blockchains – if anyone had the time to do so!
Ethereum and Ripple Also Fall in Value
Bitcoin is the most common and most widely traded cryptocurrency. The Chicago Mercantile Exchange and the CBOE futures exchange are two of the world’s largest commodity exchanges. Both of these exchanges permitted trading in Bitcoin futures, so it is by no means an insignificant form of currency.
Although Bitcoin is the largest, there are many others. The majority of these also lost value on Friday. It’s not just Bitcoin. The popular Ethereum fell by more than 20% as did the newer Ripple. Both joined Bitcoin with a slight recovery, although nowhere close to their November price.
Too Many Cryptocurrencies Now?
However, it may also be a signal of something amiss: perhaps too many such currencies are jumping on the bandwagon. Perhaps hackers are beginning to figure how to break into the exchanges, making such currencies untenable in the longer term. Whatever the reason, it is worrying for Bitcoin and the other cryptocurrencies. Then again, it may be nothing and will blow away next week. Who knows?