This week’s bitcoin review focuses on the roller coaster that bitcoin decided to board as the week began.
Bitcoin’s big rebound
Oh, bitcoin. You had such a good run. During the past three months, the price of bitcoin had stabilized compared to the days after the fall of MtGox, floating somewhere between $550 and $650 for the majority of the time. However, on Monday, bitcoin’s price took a big fall to a three-month low of around $435.
It’s a roller coaster that those involved in bitcoin — and those who cover it — are familiar with. The price of bitcoin falls, dusts off its knees and peaks again.
While “volatile” has become a favorite negative buzzword around the nascent virtual currency, each crash is a reminder that bitcoin is more than a replacement for the dollar or its blockchain technology. This week, the finger was pointed at margin calls for the cause of Monday’s crash. Both BTC-e and Bitfinex allow margin trading and experienced sudden crashes in their prices. Add that to impending pressure from the New York Bitlicense regulations and rising difficulty with mining, you have another dip in bitcoin price.
As CoinDesk pointed out in a very thorough response from the exchanges, margin trading is just this week’s scapegoat. There’s a lot that can influence the market, from mining hash rates to margin trading to press coverage to social media, and bitcoin’s price has so far been susceptible to high levels of fluctuation.
The market this week
After Monday’s crash, the bitcoin price has returned to above $500. The price jumped 5.66 percent on Tuesday and another 5.18 percent on Wednesday. Thursday saw a steadier market, although it jumped as high as $532 before closing at $516.16. Bitcoin price was at $520.39 as of 10:00 AM PDT on Friday.
In other news we wrote about this week:
- Dutch bitcoin company BlockCorp has launched the BlockTrail, a new bitcoin analytics platform.
- Bitcoin took the stage at Y Combinator’s Demo Day. The digital currency was the theme of several startups, like BitAccess, which pitched to the audience of investors. Expect to see many of these companies in the bitcoin space soon.
- What happens to your bitcoin when you die? Delaware passed a Digital Access Act to try to clarify how our digital lives — including things like bitcoin or your Facebook account — are handled after death.
Here are some of the best reads from around the web this week:
- The comment period for the BitLicense regulation has been extended another 45 days — a move that many in the bitcoin community have been campaigning for. CoinDesk has an in-depth interview about the proposed regulations with Ben Lawsky, the author of the regulations, who reveals that some of the community’s chief complaints concerning software have just been a misinterpretation.
- The bitcoin net just got a little wider, too. Overstock.com plans to open up bitcoin payments to its international customers on September 1, reported the New York Times.
- Bitcoin has long been touted as a solution to remittance payments. The Guardian reported on how companies like BitPesa are working to transform money in Africa.
- CoinDesk has released a new bitcoin tracking tool: the Bitcoin Sentiment Index. The experimental tool uses data from Qruiosly to gauge how people are feeling about bitcoin’s prospects in the U.S. and the U.K.
Bitcoin in 2014
The history of bitcoin’s price
A note on our data: We use CoinDesk’s Bitcoin Price Index to obtain both a historical and current reflection of the Bitcoin market. The BPI is an average of the four Bitcoin exchanges which meet their criteria: Bitstamp, BTC-e, LakeBTC and Bitfinex. To see the criteria for inclusion or for price updates by the minute, visit CoinDesk. Since the market never closes, the “closing price” as noted in the graphics is based on end of day Greenwich Mean Time (GMT) or British Summer Time (BST).
Feature image used with permission from Brainless Tales