Bitcoin continues to show bearish price action, with the weekend falling below $5,800, which is the lowest level this year. Although there is no single reason for price adjustment, some important factors have undoubtedly played a role. These include government supervision and hostilities and the internal challenges of the platform. Although all these problems can be solved, there is no doubt that Bitcoin needs to make changes to achieve a sustained level of value.
In any case, the news of the past few weeks is not a good thing for the flagship cryptocurrency. Some negative reports caught the attention of investors. The reports included two Korean exchanges being hacked and the Reserve Bank of India issuing a decree banning Indian banks from participating in cryptocurrency or encryption services. In many countries, oversight is also growing, and a recent report by the Swiss Bank for International Settlements stated that mainstream adoption of Bitcoin may “set the Internet to a standstill”.
These factors alone are not enough to cause such a significant decline in value, but Bitcoin also needs to overcome its technical limitations and become a platform that can actually honor its promise as a decentralized currency. Despite the release of the Lightning Network, trading hours still averaged more than ten minutes. In addition, the public has not made the concept of bitcoin a superior choice for the legal currency. Wallets and exchanges may be easy to use for technical knowledge, but compared to bank accounts and debit cards, most of the public find them confusing.
Therefore, given the current problems, the decline in Bitcoin since January is understandable. Of course, there are many reasons to speculate that prices will rise, and may be much higher than their $20,000 high. In any case, the transaction time will be shortened and there is no doubt that other issues will be resolved. But like other cryptocurrencies, the value of Bitcoin will ultimately be determined by its use. All prices in the current password space are speculative because the blockchain has not yet become mainstream technology. There is no doubt that it will determine the true value of Bitcoin and other platforms at the time.
Perhaps one of the key indicators Bitcoin will recover is the fact that the entire password space has fallen with it. In fact, the value of some major alt coins has fallen even more. This fact clearly shows that the decline of Bitcoin may become more of an indicator of investors' skepticism about the entire encryption industry, rather than specifically targeting Bitcoin. Given that many platforms are rapidly advancing in adoption and development, the focus on investment will surely follow. However, to successfully implement long-term Bitcoin, it must demonstrate its ability to keep pace with its competitors' technological advantages. In fact, competitive platforms pose a greater threat to the long-term viability of Bitcoin than hostile governments or suspected publics.
Continued price declines are more proof that volatility remains the norm for cryptocurrency values. Bitcoin may recover, but in order to become a permanent standard holder of cryptocurrency, systemic issues will need to be fixed. Specifically, ordinary people need a reason to use it and must be accepted by governments around the world safely. Given the revolutionary potential of blockchain technology, these steps will almost certainly happen.