How Bitcoin rises and falls & why this time will be no different
Bitcoin once again is a hot topic for the mainstream media, not for its fundamentals or reasons why it will change the financial world in a positive way, but to report on another hacking incident. I’ll spare an explanation of what happened and let you read about it at CNBC’s website http://www.cnbc.com/2016/08/03/hong-kong-bitcoin-exchange-says-it-was-hacked-trading-suspended.html.
A big challenge for the growing adoption rate of Bitcoin has been due to the main media only reporting on negative news. Since most main media outlets are ultimately owned by central bankers (take CNBC, CNN and Fox news for example being owned by the Rothschilds), it isn’t hard to understand why they do not want competing currencies like Bitcoin to be adopted and hence only report negatively about it.
For further information around the Rothschilds’ ownership of media companies, you can read more via this website https://politicalvelcraft.org/rothschilds-media/.
If you, like myself, follow alternative media channels and sources, you will read and hear about positive developments in the Cryptocurrency space almost every day.
I want to point out that since the creation of Bitcoin back in 2009, it has suffered many negative events along the way that have caused the price to suddenly drop, only to rise back up in the following months. I firmly believe that the drop in current price will be no different this time around. The economic problems in the world have not changed and Bitcoin itself is still sound and secure.
If you were waiting for a cheaper entry price to buy your first Bitcoin(s) or if you were hoping for a pullback in price to build on your existing position, then now would be a good time to take advantage of it.
Speculative bubbles have popped over the years, which have thrown the price action around, however the overall upward price trajectory indicates that Bitcoin is in a long term bull market. The corrections along the way are simply normal market price actions (a temporary state of under value or over value), effectively a shake out of weak hands and some speculators reacting with their emotions.
To put things into perspective, I have pointed out on the two charts below, how Bitcoin has recovered after previous negative events. By far the most severe event was the sudden suspension and closure of the Mt.Gox exchange in February 2014.
Historical dates of events that have negatively impacted Bitcoin
The numbers associated with each event below relate to the numbers indicated on the following charts.
- (1) 19 June 2011, a security breach of the Mt. Gox Bitcoin exchange
- (2) July 2011, the operator of Bitomat, which was a large exchange at the time, announced that he lost access to his wallet.dat file.
- (3) August 2011, MyBitcoin, declared that it was hacked and is no longer around.
- (4) August 2012, Bitcoinica had a lawsuit filed against it in a San Francisco court.
- (5) August 2012, an operation titled Bitcoin Savings and Trust was shut down by the owner.
- (6) September 2012, Bitfloor, a Bitcoin exchange, reported that it was hacked, with 24,000 Bitcoins (worth about US$250,000 at the time) stolen.
- (7) 3 April 2013, Instawallet, a web-based wallet provider, was hacked.
- (8) 11 August 2013, the Bitcoin Foundation announced that a bug in a within their Android operating system had been exploited to steal from wallets.
- (9) October 2013, Inputs.io, an Australian-based Bitcoin wallet provider was hacked with a loss of 4100 Bitcoins.
- (10) 26 October 2013, a Hong-Kong based Bitcoin trading platform owned by Global Bond Limited (GBL) vanished with US$5 million from 500 investors.
- (11) February 2014 - Mt Gox, the largest exchange at the time, lost 744,408 Bitcoins which forced the company into liquidation. This undoubtedly caused the biggest drop in Bitcoin price.
- (12) 3 March 2014, Flexcoin announced it was closing its doors due to a hacker
- (13) January 4th, 2015 - Bitstamp's operational wallets were compromised. Roughly 19,000 Bitcoins were lost in the hack.
- (14) August 2 2016 - Bitfinex halted trading after discovering a security breach, which included taking its website offline and pausing all withdrawals and deposits. Roughly 120,000 Bitcoins were stolen.
Jan 2011 -> Jan 2013 @ Mt Gox
Jan 2013 -> August 2016 @ BTC-E
If we look at the most recent drop from last week, the price has already rebounded and recovered quite well:
We shall continue to observe and see what the future brings.