Here are my take on the fall of Bitcoin price. There are three groups of people that I categorized. The Miners, are the people whom mine the coins and keep the network healthy. The investors, are the people whom just simply buy Bitcoin and sell it for profit. Then the consumers, this group I think a lot of people would question, really? consumers? Well yes, as more Bitcoin ATM machine are being installed, consumers will the people whome convert their Bitcoin to Cash, Cash to Bitcoin then spend it on products and services just like cash and credit card.
So what will happen?
- The miners, at this point are thinking about quiting, quit mining because electricity cost are a lot higher than what they profit mining bitcoin. However if this is not the case, a lot of miner think this way, but they are more inclined to think that there will be a lot of miners thinks that, and so they will hang on to mining, hoping that other miners quit, result hash rate network down and whoever still mining get more coins. So I think the hash rate will not drop, even people are loosing money, but if this goes on for another couple or months where Bitcoin don’t pick up the price back to even $500, then most likely the miners will loose faith and will stop mining due to the loss, no money to pay for electricity.
- The investors, at this point, many older investors already drop out by seeing the activities of selling. Some investors held on to their Bitcoin because they don’t want to take a loss. Many purchased at $600 or more when it stabilized at that point, wouldn’t expect it to go down further, but it did to 500, then 400, then now 300. With this trend 100s is inevitable. But wait! when goes down so low, 100s, and there isn’t bad news about it, more new investors will jump in and start to push the price up again.
- For the consumers, to me in the Bitcoin communities I would call these group are the people whom spend the Bitcoin, including the merchants that are accepting Bitcoin. This is where I think it gets complicated. Will the people loose faith due to the value of Bitcoin fluctuate so much. Buying one coffee cost .001BTC for example, but the next day, it cost .005BTC, this will discourage the folks whom are using Bitcoin. However the positive side is it keep the momentum of bitcoin going mainstream active. The thing is not too many people know about Bitcoin, when they do it’s a learning experience, from beginners to too confusing then back to norm.