Reason for Bitcoin Sharp Price Drop This Past Week Revealed
Welcome news for cryptocurrency investors came Saturday with a sharp rise in prices across the board.
Shortly before 4 pm EST Saturday, Bitcoin was up nearly 12% from the previous day's trading to $12,740, Bitcoin Cash was up 18% to $2,057, Ethereum was up 11% to $1150 and Litecoin was up 11% to $210.
The managing director at eTorro, Russia, Georgy Verbitsky, told RT.com that the influx of “mass-market consumers” looking to join the cryptocurrency trend led to the sudden surge in price for bitcoin. Last month the price of Bitcoin flirted with the $20,000 mark.
Verbitsky believes that professionals benefited by making quick profits from last-minute amateur investors.
Mr Verbitsky told RT: “Many people behind bitcoin and cryptocurrencies as a whole understand that the skyrocketing prices in the last few months are linked to cash inflow from mass-market consumers. Even pensioners wanted to invest.
“Experienced investors knew that the bitcoin honeymoon couldn’t last forever. Those who catch the last train are usually punished by the market.
“Big-time miners and investors understand that they needed to diversify, that they hard to get some fast money. People who raised money on the ICOs had to pay wages to developers.”
He added: “It was about pure greed,” he said. “Of course, after they lost a third to a half of their investments, they pushed the sell button. A consolidation around $12,000 and $14,000 can now be expected.”
Other developments such as threatened regulation of the cryptocurrency markets in both China and South Korea certainly didn't help matters.
A recent drop in trading volumes in Asia was also observed as investors in South Korea and Japan have reportedly grown tired of paying a significant premium over the price of digital coins in Western markets.
Mati Greenspan, an analyst for eToro, told VICE News there was some cause for optimism after trading volume in both countries jumped Thursday as premiums came down a bit.
“Though the prices are still elevated, this is a great sign that the market is indeed evening out,” he said.
“The crash is actually a good thing for the industry as it can shake out some of the speculators and consolidate the tremendous gains seen over the last few months,” Greenspan said. “Of course, the best thing would be a sustained reduction in volatility to increase stability.”
- Aaron Goldstein, Gambling911.com
