Yes, who can be in change for Bitcoin exchange rate tremendous fluctuation? Well, there are not so many suspects, let’s review each of them and find it out.
Bitcoin is definitely currency of the future, since it is digital, difficult to fake, anonymous, world wide, not controlled by any government and easy to use. Now it became mainstream, more and more shops starts to accept Bitcoins as payment.
But there is disadvantage also, during last 30 days Bitcoin exchange trends jumped from $40, hit the level of $260 and rolled back to $70 per coin. This rally became a golden rush. So what has affected the price so much?
There are some rumors that economical crisis in Cyprus could affect Bitcoin exchange rate. This reason is possible, especially when thinking about tax trap created by Cyprus government. Deposits more than 100,000.00 EUR started to be taxed up to 60%. Obviously owners could try to rescue their savings by converting it into Bitcoins and taking them back. But there is a big doubt that such operation could be allowed by banks with frozen deposits. Especially when amount is considerable.
Another possible fluctuation reason could be a high demand due to growing popularity and sharp fall due to increase of computational power. Huge pick of Bitcoin difficulty is an evidence of the fast growing computational power. Recently real SOC solutions became available for Bitcoin mining and it explain the fall, but still it is hard to explain 10 times price growth by popularity, so let’s find another reason.
And most realistic version, from our point of view, is speculation by major market players. in practice there is a single major market player Mt.Gox. And it holds up to 60% of the market. Literally, you can do what ever you want in bitcoin sandbox when you own 60% of all transactions. The reason for the price fall was ‘Out of Service’ message on Mt.Gox website. Later it was confirmed that Mt.Gox servers had been under heavy DDoS attack. People could not sell their assets and BTC price kept falling down.
Now, ask yourself. Who’s most interested in Bitcoin volatility?