Unless you have been hiding under a rock, you will know that 2018 has not been the best for Bitcoin. Although the price has started to pick up again, it has seen another price drop, where it dropped below $8,000.
However; experts have pinpointed the price plunge down to three reasons.
Richard Titus believes that part of the reason for the price fall is because of tax. He said;
“The softness is from a number of factors…A lot of people made a lot of money last year and people have to pay taxes on their trades.”
Tighter regulations have come into force when it comes to declaring and taxing your Bitcoin earnings, which has reduced the popularity, and dropped the value.
The Securities and Exchange Commission and the Future Trading Commissions have come under a lot of fire for proposing tighter and more strict regulations surrounding the cryptocurrency market.
However, these regulations have put as big strain on the Bitcoin market, causing the value to drop. Many experts believe that this recent slump will be just short term though and that tighter and more regulations surrounding Bitcoin and the cryptocurrency market on the whole will actually be a positive move, and the value will begin to increase again. This is because it will stop any scams getting into the mainstream, and will increase peoples trust in the market, and will stop the price volatility.
Mt. Gox was once responsible for handling 70% of Bitcoin transactions globally, but was the victim of an 850,000 Bitcoin theft back in 2014, which led to the suspension of trading, and a file for bankruptcy. However, this was halted after the company managed to recover a portion of the stolen coins.
Mt. Gox sold approximately $400 million of Bitcoin between December and March, and despite these sales claiming to be over the counter, investors have speculated that these buyers actually then sold the Bitcoin on the open market, which caused the price to drop each time.