Bitcoin Price Collapse 9/19/14

The recent collapse in Bitcoin’s value is one more reminder of the volatility involved in cryptocurrencies. It’s also a reminder of human nature: Everybody loves something when it’s up, but even Bitcointalk users will act disillusioned at times when it’s way down. Perhaps people are simply forgetting one of the first rules of investing. Buy low, sell high, and sometimes you’ll have to ride out the times when something is going through a rough patch if you’re sure it’ll work in the long run. I see Bitcoin as a currency as much as it is an investment, but then, people who watch the Foreign Exchange markets know that fiat currencies sometimes do the same thing.

bitcoin collapse 9-19-14

Bitcoin Price Collapse 9-19-14

You could blame a lot of external factors for the slide that ended with the 9/18 sell-off that led to Bitcoin’s price drop to under $400. There was talk that Scotland could adopt Bitcoin or something like it as its official currency if the independence referendum came through, but the referendum failed to pass. eBay Corporation is planning to incorporate Bitcoin into its Braintree platform, but its recent policy changes seem to indicate that it’s still not all that friendly towards cryptocurrencies. Regulations around the world are a constant concern for Bitcoin users who worry that the whole thing could be marginalized to the point where its image as a currency for the black market becomes a reality. Considering the number of times that the hopes of Bitcoin users have been dashed, maybe it’s small wonder that they can be so nervous about holding on to their Bitcoin.

Price predictions don’t really help when probably ninety percent of them are just wishful thinking from Bitcoin users who really don’t have all that much. There are people who say that Bitcoin can get back up to $1000 by the end of the year and, while that is one distinct possibility, I’ll be happy if the price of a Bitcoin gets back to about $600. I wish they would just quit because it doesn’t help when the most loudly stated predictions fail to happen. My prediction is that the Mars One chick could surprise us all and take a tablet with a Bitcoin wallet to Mars just for fun. That could have the side effect of boosting the Bitcoin price simply because the viewers of the Mars One media events get curious and buy a little Bitcoin just to see how it works. Changes in the Bitcoin price is all about supply and demand and what we really need to boost the price is to increase the demand.

Maybe it’s just that we need to quit over-analyzing things, pay attention to the news but don’t become obsessed with the occasional bit of bad news, and use our Bitcoin to buy coffee and gift cards rather than dump it on one of the exchanges when things look rocky. It’ll send the message that we aren’t panicking even though one country or another might be talking about regulating cryptocurrencies. When dealing with the volatility of Bitcoin, you should follow two rules: “Don’t Panic” and “Buy Cheap.”

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