What's the matter with the sharp drop in bitcoin price? As a virtual currency, bitcoin has attracted many people's attention. What's the reason for the erratic price of bitcoin? On Thursday, bitcoin plummeted more than $300, down about 13% from a record high of nearly $2800 to around $2430. Bitcoin opened Thursday at $2476.30, surging to an all-time high of $2791.70, up 12.7% or $315, according to data. Later in midday trading, U.S. stocks recounted all day's gains and are trading at $2466.40.
Since the beginning of the year, bitcoin has broken through the $1000 and $2000 barrier one after another. In the near future, bitcoin has been rising sharply, one hundred yuan a day.
On May 22, the price of bitcoin rose by more than 11%, breaking the 2100 and 2200 dollar barrier in one fell swoop in the day, setting a record high of 2289.21 US dollars per piece. Since then, on Wednesday (May 24), bitcoin has once again reached a record high of $2400 / PC, breaking through $2700 / PC on May 25. Bitcoin has climbed 30% in the past week alone. Since the demand of Asian investors on Saturday (May 20) pushed the price of bitcoin up more than 2000 US dollars / piece for the first time, the main digital currency Conference opened in New York on Monday (May 22), and bitcoin gained momentum further.
There are many real reasons for bitcoin's rise. Bitcoin is becoming more and more important, more and more companies accept bitcoin as a means of payment, and regulators also begin to accept bitcoin as a means of cooperative investment. In the future, bitcoin may become a mainstream asset like us dollar, stock, gold, bond and so on. The soaring bitcoin has become the hottest topic in the global investment community, but there are also many hidden concerns behind it.
Although some investors believe that bitcoin will become a feasible alternative to safe assets such as gold in the future, the volatility of the sharp rise and fall of bitcoin further highlights its instability.
In January, Chris burniske, head of blockchain products at ark, pointed out that bitcoin's daily volatility was about a fifth of what it was five years ago. 'while the frequency of fluctuations in bitcoin prices has been declining over time, bitcoin should be seen as an unstable asset. '
As we all know, the long-term storage value of bitcoin lies in its limited total amount, 21 million in total, and its stability, security and scarcity. With the increasing popularity of bitcoin, the scale of users is also growing, which also causes the problem of bitcoin network congestion. Bitcoin network only allows about seven transactions per second, but for tens of millions of users around the world, the transaction processing capacity is too low.
In addition, high fees and slow confirmation speed caused dissatisfaction among miners and traders. With the increasing popularity of bitcoin in the world, some functions of bitcoin's initial network to be upgraded have gradually become an obstacle to the development of the industry.