The power of news
Governmental statements and geopolitical events have always influenced user’s behavior. In the second part of 2016, Bitcoin’s price streamed upwards due to the demand increase from India, China and other emerging markets. Surely, mass media couldn’t miss this information and fueled the rally, magnifying the bubble. As a result, less experienced investors entered the bull market and joined the ‘gold rush’ for Bitcoins.
However, the situation hasn’t lasted long. After the PBOC (People’s Bank of China) sent a warning notification concerning the risky nature of investing in Bitcoins, the rally came to an end. It’s no wonder that investors dealing with this digital currency paid much attention to the Chinese authorities’ statements, as approximately 90% of Bitcoin trading happens on Chinese exchanges.
Bitcoin’s fair value is indefinable and it’s difficult to estimate whether the price is increased due to real demand for transactional currency or it is driven by speculators making profit on price jumping.
Bitcoin’s faith is still a matter of time. If you’re a risky investor, then you can go ahead and invest no matter when, even today or tomorrow, as Bitcoin’s price may change greatly at any minute.