Bitcoin Market Nightmares: Whales And Hodlers To Blame

BTC whale

Bitcoin has lost over 75 percent of its value within the past year, and many less popular cryptocurrencies are currently on the verge of going completely belly-up. The most recent roller coaster market-plunge occurred within the past month and has left many HODLers and crypto investors strung out.

So What Caused Bitcoin’s Price to Plummet?

To get a logical answer to this question, it is important to first look at the circumstances that led to the 2017 bitcoin price escalation and the ecosystem that existed before its rise. Also worth noting are factors that led to BTC’s precipitous decline at the beginning of the year.

Looking at the period before BTC’s meteoric rise in 2017, Bitcoin was mainly popular among smaller close-knit groups of enthusiasts, and traders who mostly peddled black-market paraphernalia. This millpond ecosystem and the Silk Road marketplace, in particular, are credited for having contributed immensely to bitcoin’s growth during its early stages.

Founded by Ross Ulbricht in 2011, just two years after the invention of Bitcoin, Silk Road’s one million customers primarily relied on bitcoin to transact. This and other related communities are believed to have helped prop up bitcoin’s value as a medium of exchange, at least initially, and enabled it to achieve steady growth through sustained demand.

What triggered the 2017 price upswing was the entry of HODLers and institutional players who had started to take notice of its potential. They triggered an initial price spike led to a series of hikes, catalyzed by a mad dash to acquire the cryptocurrency by mainstream players. The situation was much like the gold-rush days of old. In this instance, the fear of missing out (FOMO) drove demand.

Consequently, bitcoin’s value rose from $1,188 in March 2017 and reached its apex at $19,650 in December, an impressive 1,654 percent price surge in just nine months. The eventual burst in 2018 occurred after market-growth reached unsustainable levels.

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