Bitcoin hits all time time nearing $42,000 start of New Year has dropped significantly to 30,000 lowest since start of this year. The primary reason for this drop is connected to two major events.
- BitMEX Research Team suggested that a critical flaw called “double spend” had occurred in the Bitcoin blockchain.
2. Janet Allen from Biden administration mentioned about “curtailing” Bitcoin in her speech early this week
What this means for Bitcoin holders and why does it matter ?
“Double spend” is a technical glitch where a user can spend their bitcoins multiple times. This fundamentally questions the entire Bitcoin ecosystem and if this is proved to right the price of Bitcoin can drop to $0. However this was mentioned multiple times in the past and none of the theory has proved to be right. Its possible that a big whale with huge number of bitcoins is playing for price manipulation.
Till the double spend is proved by the researches the price may take a hit for a while and some even predicting the price to $20,000. At the same time, Ethereum may gain momentum and may reach all time highs in few weeks or months from now.
Janet Allen mentioned she wanted to ‘curtail” Bitcoin. This means the money coming from US users and institutional investors may face lot of issue. This will not stop Bitcoin since its decentralized and not controlled by Central banks of any countries. However there can be a temporary drop in Bitcoin value temporarily.
Janet Allen has never been clear in her stand on crypto in the past. Hence its almost impossible to know what her thoughts are. Its true that more and more banks are trying to be open for Bitcoin, which she may consider as a threat due to the decentralized model.
Impact of Gold & Others
The price of the gold has taken a hit due to Bitcoin and that’s not something any governments will like to see. Some of the largest institutions such as Blackrock is planning to invest in Bitcoin which sends a strong message to the world saying crypto is here to stay however this raises a concern for central banks and the Feds here in the United States. Many even believe Federal reserve printing of money will devalue the dollar and crypto is considered as a hegde by many. With all these things going on Bitcoin may take a short hit short term which is not new to the newly evolving crypto space
Pic courteously by TradingView
