Bitcoin was named one of the worst investment of 2014. As predicted however, 2015 has seen the continued fall in value of the world’s most popular virtual currency that was supposed to fuel the digital age. Low peak value on some bitcoin exchanges reached approximately $155 and became terrifying fall at a half the cost for only 2 weeks year to date.
The price of Bitcoin dropped again this week, sliding to its lowest level since early 2013, suggesting that confidence in the contentious cryptocurrency may be shrinking. On Wednesday morning, January 14th, 2015, the price of Bitcoin dropped from $226 to about $170.
Bitcoin price tumbled $25 or 10%, to trade at $209.91 on Slovenia-based BitStamp, the world’s second largest bitcoin echange, during morning hours, after hitting a session low of $152.40, a level not seen since April 2013. During early Thursday hours, the price was fluctuating from $194 to $208.
In the past year, the digital currency has been hit with countless obstacles including market troubles, fresh regulations and stagnation of usage even as transactions have increased, which in part resulted in a more than 60% drop in the price of bitcoin.
Later the UK-based Bitcoin exchange Bitstamp was ‘hacked’ and nearly 19,000 Bitcoin stolen. At that time, this loss represented roughly $5 million. Bitstamp has since resumed its services with revamped security from BitGo. Besides, the company is providing commission-free trading to all of its customers until 17th January at 11:59pm UTC.
There is no doubt that the plummeting price of bitcoin has had effects throughout the bitcoin economy. While merchants may be climbing to refill their margin accounts or to bulk the short swaps, some miners are apparently beginning to find their positions unsound as well.
Bitcoin trading platform and exchange CEX.IO has announced a temporary suspension of its cloud mining activities on January 12th, 2015. The company has blamed decreasing revenues against a plunging bitcoin price. Before the suspension, the company’s customers experienced destabilization to their cloud mining service, which CEX.IO at that time referred to third-party difficulties.
“Taking into consideration our users’ interests, the recent Bitcoin price drop, as well as the upscaling of the mining difficulty, CEX.io Bitcoin exchange would like to announce a temporary suspension of cloud mining services provided by the platform at the time of the next difficulty increase,” the company wrote in a blog post.
Besides, CoinTerra is being sued by C7 Data Centers for alleged breach of contract and for $1.4m worth unpaid services. In court documents, C7 Data Centers alleges that former partner CoinTerra acted in bad faith by intentionally underpaying for services and demonstrating a pattern of late repayment. In total, C7 is seeking $5.4m in damages, court fees and related charges.
“CoinTerra disputes the allegations in the complaint filed by C7 Data Centers in Utah State court,” CoinTerra said in a statement. “Moreover, CoinTerra has filed a counterclaim against C7 in federal court in the District of Utah. CoinTerra intends to vigorously prosecute its claims against C7 while defending the claims levied by C7.”
Furthermore, Bitcoin ASIC Manufacturer Mining ASICs Technologies (MAT) was claimed bankrupt by a Maastricht judge on December 30th, 2014, one week after the company CEO Marc Coumans announced bankruptcy.
Bitcoin’s market line has been on a steady decline in recent months, even when the digital currency has been getting more popular with big traders and retailers, including Microsoft, PayPal, Expedia, Overstock.com and Dell.
Some analysts say instability in the Bitcoin market may be arising from the Silk Road’s Ross Ulbricht trial which began in New York this morning, and the potential for further regulation may be a result of the findings.
Ross Ulbricht is the alleged owner of Silk Road, the $1.2 billion online black market where drugs and other illegal goods could be bought anonymously using bitcoins, that was seized and shut down in October 2013.
Ulbricht was charged in Manhattan with conspiracy to commit narcotics trafficking, computer hacking and money laundering for a scheme extended from January 2011 through September 2013. According to court recordings, the site achieved $80 million in commissions on sales of more than $1 billion in less than three years.
Hacks of bitcoin exchanges characterize the Bitcoin world. The bitcoin price affects the companies that have sprung up around the troubled technology. The hack of one-time leading Bitcoin exchange Mt Gox, was a result of careless coding and business practices. Besides, it was an inside job, defrauding its customers of $487 million.
Market analyst Martin Tillier suggested that the price of bitcoin will continue to fall until its pre-nullified levels. “Why would the bitcoin bubble of 2013 be any different? If anything, when looked at it as a deflating bubble, the drop in price has been fairly slow,” Tillier discoursed on bitcoin price in his Nasdaq trading blog column.
He continued: “Should the decline in exchange value continue to a point below the roughly $150 level that marked the last period of relative stability throughout most of 2013, then a case could be made that the real, underlying value of BTC was questionable before the jump.”