Bitcoin Owners Gambling on Volatility of BTC Prices?
Last week’s Bitcoin (BTC) trading went into frenzy as massive trading activities drove the price of BTC to an all time high of $266 per piece; but as events began to unfold, BTC prices later went down and continued to fluctuate toward the end of the week. Based on last week’s chain of events, it seems that bitcoin owners ended up gambling with their virtual money by trading BTCs for speculative purposes.
At the height of the buying and selling activities on Wednesday, and as traders started complaining about lags in the processing of orders, Tokyo-based Mt. Gox, which handles about 80 percent of BTC trading, had to suspend trading for a “market cool down” of some sort.
Apparently, Mt. Gox’s trade engine was unable to catch up with the unceasing flow of trading activities, which prompted the site to halt its operations temporarily. Mt Gox, professed that they are into processing as many as 20,000 new BTC accounts on a daily basis, resulting to a threefold increase in the volume of transactions in last Wednesday’s activities.
However, when trading resumed on Thursday, there were more sellers than buyers, which caused BTC trading prices to plummet to as low as $40 to $55 apiece. Aside from the cancellation of previous orders, observers opined that Mt. Gox’s suspension triggered panic reactions among bitcoin owners.
Still, many of those who were tracking the virtual currency‘s trading performance grabbed the opportunity to buy (or hoard) more bitcoins while the BTC price was on a slump; thus, driving the BTC price to reach $100+ by Thursday night. The speculations over BTC’s volatile prices brought another onslaught of selling activities, which subsequently drove the price down to $61.11by 9:00 a.m.ET on Friday.
Many are giving advice to take caution, because last week’s chain of events is just a preview of how the bitcoin bubble may eventually burst for good.