Bitcoin – An investment opportunity?
B for Beginning
Great has been the triumph of Bitcoin during last year and the beginning of 2014, crushing other online currency payments and becoming the best on the market. However, frauds and other security issues caused the famous e-currency to tumble loudly and heavily on the market, with more than $500M worth Bitcoin stolen. With the closure of Mt. Gox, less and less consumer or “bitcoiners” have backed off the market, leaving it wounded and crawling against other e-currencies.
What is happening?
The currency has lately been revived by various companies trying to push the Bitcoin back to its glory days. For this, a U.S based company that offers API based payment organism came up with an examination of how it expects the Bitcoin market to develop. The company explores Bitcoin’s possible use as a financial solution in nations with high-inflation currencies, as well as the technology’s role in global payments infrastructure. However, recent sell offs pulled the price of the currency below the $300 mark
last week, prior the fall of the Cryptocoin below the $400 floor price. The next question is whether the $300 price level will represent a new floor for Bitcoin. That’s to say it’s will be interesting to see if $300 is the price point under which Bitcoin will not sink, but may bounce off of a few times. Or, on the bear side, if the Bit currency’s recent, steep price declines will continue.
Helping hand or deceptive hand?
There is certain sarcasm to the negative price momentum that Bitcoin is currently enduring. It has seen increasing support from retailers, precisely the network growth that its adherents have hoped it could gather on the market. However, such support by PayPal, and others are not driving its price upward. This could be an argument that potential short-term increases in the volume of Bitcoin transactions do not drive up its per-unit price.
Moreover, the increase in the number of merchants now accepting Bitcoin could also be affecting the price. These merchants, including Overstock and Dell, use third-party payment processors like Coinbase to immediately convert Bitcoin to dollars. This means there are more Bitcoins in circulation, which could be helping to drive down the price.
Finally, with the E-Currency’s association with Green Peace and other Non-Profit organizations, its goodwill might push up on the market and attract more investors in the near future. However, time will just show the market and its investors, how lucrative or not is the market for online currencies.