Last December the price of Bitcoin almost hit the $20,000 mark which was its all-time high. Since then the price dropping mainly because of regulation talk. Today the most popular currency is trading just above the $10,000 mark. This unpredictable price change has been worrying investors who are now worried that the liquidity of the digital currency will be limited something that would have a big impact on its overall value.
Companies are moving away from digital currencies
Bitcoin is very volatile something that seems to be hindering it from becoming mainstream. Its volatility has also seen potential investors hold their funds as they wait for its price to stabilize. More to that the currency has also been linked to crime and especially associated with the underworld something which has seen many companies question the transparency and credibility of the currency.
In January Facebook announced that it was banning all crypto ads on its platform. More to that many banks in the United States announced that they would not allow the use of credit cards to purchase Bitcoin and other digital currencies. Other companies which were allowing Bitcoin as a means of transport have also stopped due to its unpredictability.
Speculation seems to be doing more harm than good
In the past few weeks, speculative buys have seen big sell-offs of Bitcoin. The sell-offs are affecting the market since the price fall when there is a massive sell-off. A good example is Alpha Inc. which has seen its shares fall by as much as 26% within the first two months of this year.
The market has not established itself enough
The bitcoin market has been struggling and especially to compete with the fiat currency. It’s true that Bitcoin has grown over the years but has struggled to compete with these currencies. The main reason could be that governments still prefer the centralized means of payments or the digital currency is not stable enough to be accepted as a store of value.
It’s true that online transaction often has security concerns but cryptocurrencies seem to be having more. The digital currencies have lost Billions in the hands of hackers which has led to massive losses to investors. A report this year showed that Cryptocurrency market is the most targeted by hackers and that has already been evident with exchanges like Coincheck losing more millions due to cybercrime.