Rampant trend move is actually the typical character of crytocurrency market. Bitcoin , which showed signs of recovery during the first half of April, once went up to more than $9900, just one step away from being exceed the mark of $10,000. But it soon dropped to the price level of around $8500. After 10 days of maintaining around this price level, Bitcoin experienced a lasting slump since May 21st , and on 24th , it price fell below $7300.
There follows the news of stronger regulation on crytocurrency. Bloomberg News citing people familiar with the discussion saying that the US Department of Justice has launched investigation on the case of traders’ price manipulation on Bitcoin and other crytocurrency.
The Mas also make an announcement to ban no licensed Bitcoin trading activity in 8 crytocurrency exchanges. In addtion, the organization also claimed that measures has been taken to refund the capital.
By the time of 18:00, Bitcoin has shown a 6.37% slump in its price in the past 24 hours and a 25% drop during the past 20 days. And the downward trend seems to be wide- ranging, for we also see a slump in altcoins, such as ETH whose price stands at $600.39 and Stellar at $0.294052, compare with Bitcoin’s $7,518.35 USD (from.citicoins.com)
According to Wang Shengze, the innovation consultant of The Royal Bank of Scotland, though regulation is a cause to recent fluctuation in the market, but the crytocurrency is in the cold winter and the temperature of the topic has significantly dialed down. “Actually, there is bubble in this tokens”
And Wang also mentioned that ,Bitcoin or ETH are both the innovative application in blockchain industry and it’s more likely to be replaced by other better and more cutting-edge program. Therefore, it’s common to found out bugs in the smart contract and a reduced value in currency.
Actually, most of Bitcoin or other crytocurrency holders are expecting a profit in the next Bitcoin trading ,rather than a replacement of fiat currency with cryto one. In other world, for them, the tokens is more like an asset that you could make profit from.
In conclusion, though stronger and tougher regulation on crytocurrency are the main reason for the wide-ranging slump in this week, there are also built-in weakness in the tokens and the system, and the decreased confidence for it also a factor that will influence how the curve change.