In 2017, the growth of bitcoin was 1800%. But any professional investor always takes into account not only opportunities for growth, but also factors that can devalue the rate. Bitcoin has seven reasons for the collapse.
- Investors will fix profits
Throughout 2017, the bitcoin rate was growing. As the result, a lot of people got a high profit. The price of Bitcoin, as well as that of other currencies, is formed by the supply and demand ratio. Soon, people who bought bitcoins some time ago, will start to fix profits. If the supply exceeds demand, the BTC rate will decrease.
- Speculators won’t be interested in bitcoin
Potentially dangerous is also the activity of speculators who buy bitcoins, hoping that the rate will continue to grow. Until now, demand exceeded supply, having a positive effect on the cryptocurrency value. But in case of slowdown in the growth of the trading volume or its reduction, the bitcoin rate may collapse.
- Introduction of cryptocurrency regulation
The potential possibility of state regulation can also affect the Bitcoin rate. Nevertheless, this factor can both raise the rate and devalue the currency. A good example is Japan, where authorities in the spring of 2017 recognized BTC as a mean of payment. This made Bitcoin more popular. At the same time, most states are only studying the possibilities of regulating cryptocurrency. And it is possible that some advanced country may recognize transactions with BTC illegal.
- Hacker attack on exchange
In early 2017, cybercriminals stole about 850 thousand BTC from the Bitcoin exchange Mt. Gox, which was about 7% of all bitcoins in circulation. This caused the sharpest drop in the BTC rate in the history.
Now, the probability of such a large theft is rather low. But in order to undermine the confidence of investors in the current rate, it is enough to steel only 100 bitcoins.
- Transactions will become even slower
The processing of the bitcoin transaction requires more and more time. Recently, the processing of the average transaction doesn’t take 78 minutes, as before, but 1188 minutes, that is, almost 20 hours. And this is taking into account that there is no mass use of cryptocurrency for paying for goods and services. Thus, even a slight increase in interest in BTC as a payment mean can lead to noticeable delays and become an obstacle to its widespread.
- Commission growth
The cost of bitcoin transactions directly depends on its rate. As soon as bitcoin price began to grow, the cost of transactions began to grow as well. From a few cents, it grew to $28. If BTC becomes not only slow, but also expensive, it can lose its competitive strengths.
- Altcoins will replace bitcoin
Other cryptocurrencies are becoming more attractive for investors compared to bitcoin. They offer more benefits for less money. Thus, operations in litecoins take no more than two minutes, while Ripple takes only a few seconds.
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