Moscow: ‘Bitcoin’ rate hitting a record high of 7,888 Dollars three days back, has now sharply fallen by 1300 Dollars. In barely 48 hours, the ‘Bitcoin’ rate has declined by 17%. The fall may be triggered by sudden withdrawal of decision to implement technical improvement in ‘Bitcoin’. This decline substantiates the speculation of Bitcoin investment is an ‘Economic Bubble’.
Last week, CEM Group based out of USA had indicated trading of ‘Bitcoin’ Futures to start by year end. Post this announcement value of ‘Bitcoin’ had increased by more than 7% crossing 7000 Dollars and followed a rising trend subsequently. ‘Miners and Developers Community’ which has a significant role in the developing the Cryptocurrency, had recently announced of technical improvement in Bitcoin and had proposed to offer split option, following which the ‘Bitcoin’ rates rocketed to 7,888 dollars.
However, on Wednesday, ‘Miners and Developers Community’ decided to withdraw their improvement plan to implement ‘SegWit2X’ and to split ‘Bitcoin’. The announcement came with a clarification by Developer Community that the decision taken was to avoid a split of Cryptocurrency. This caused great disappointment amongst the investors hoping for availability of additional ‘Bitcoin’s resulting in selling of ‘Bitcoin’ on a large scale causing the rate to collapse to 6499 Dollars within 48 hours.
In the month of September, Chinese Government had suggested that it might ban ‘Exchangers’ and ‘Dealers’ of ‘Bitcoin’ which lead to a large decline in the rate of cryptocurrency. In the year 2013, since the trading of ‘Bitcoin’ commenced the rate has dropped by 25% to 35% on many occasions. It is seen that the investors across the world get attracted to Bitcoin when the rates increase and investment flows in but shortly it is followed by a decline. Some Economists and Financial Analysts are repeatedly highlighted this trend.
Recent 17% Decline in the rate within 48 hours, substantiates the concern that the investment in ‘Bitcoin’ can be an Economic Bubble. ‘The Wall Street Journal’ too has indicated that ‘Bitcoin’ to be like a big Economic Bubble similar to ‘Equity markets’ or ‘Housing Market’ of the technology Sector.
American Investor Jordan Belfort has termed ‘Bitcoin’ as the largest scam. Prince Alwalid Bin Talal, billionaire investor from Saudi Arabia had compared ‘Bitcoin’ with Enron, an bankrupt US Energy Company. Famous Investor Warren Buffet and Jamie Demon, Head of J P Morgan Chase have warned of ‘Bitcoin’ to be a big scam and that the cryptocurrency will not last long.