This might be a Good Week for the Value of Bitcoin and Other Digital Currencies. Past couple of weeks have been rough for Bitcoin and any other digital currency in the market as their values have dropped significantly. In that market, Bitcoin is bearing the biggest value and because of that the drop of its value was especially sizable. Several factors influenced the drop but almost every digital currency expert believed that the value of those digital currencies will go up very soon.
That period was one of the toughest for digital currencies in a long while. First big blow to this market was China’s decision to shut down every single initial coin offerings as an attempt to protect investors and to prevent money laundering and financing terrorism. Even though Bitcoin has nothing to do with Initial Coin Offerings in China, its value went down significantly after those news were announced.
The second blow came just a couple of days ago when once again China announced that they might be banning digital currencies in general for the same reason. This time, Bitcoin was involved in the issue and as a result the value of Bitcoin tumbled heavily. The latest blow to digital currencies and especially Bitcoin was the speech by Jamie Dimon, J.P. Morgan and Chase CEO, given at the conference not even seven days ago. There, Dimon characterized Bitcoin as a huge fraud and said that the consequences of the collapse of digital currency market will be immense.
However, the value of digital currencies did not keep low for too long. This Monday has brought another change in the market as it became obvious that Bitcoin has been gaining in value. In comparison to standard currency such as U.S. dollar, Bitcoin has gained more than 6 percent of value. Last week, the value of Bitcoin dropped below $3,000 for the first time in a long while. Yet on Monday things looked a lot different as Bitcoin grew in value once again and at this moment it is traded at $3,950 for one Bitcoin.
Over the years, Bitcoin has become very volatile as its value changes significantly within a very short period of time. Because of that, many financial experts have called upon central banks all over the world to get involved with digital currencies. Central banks were ignoring the issue of digital currencies for a long time thinking that they were not a serious threat for the established financial market. After all, with the increasing number of financial institutions warning against Bitcoin and other digital currencies it has become clear that those financial institutions have finally started to pay attention to digital currency market.
However, since digital currencies have more than doubled their values this year, it has become apparent that the established financial market will be hugely affected by digital currencies and their value. Because of that, experts believe, central banks should be able to get involve and to bring in some regulations that could potentially stabilize the value of digital currencies and prevent them from making that kind of huge drops.
Written by Vedran Ostojic
