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Topic: Markets Weekly: Seeking Answers After The Crash (Read 406 times)

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January 19, 2015, 06:07:54 PM
#3

Well thats not the only reason. There are a lot of reason why the market have crashed and variety of factors that contributed to the fall in prices.
legendary
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legendary
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New article by CoinDesk on the recent price crash:

http://www.coindesk.com/markets-weekly-seeking-answers-crash/

Quote
Why did the price fall?

In the wake of the crash analysts were left to figure out what caused it. Pantera was among the first to issue a report with a special newsletter sent to subscribers on the 14th.

The Pantera analysis names margin trading as one of the possible causes for the price decline, pointing to a record high in BTC swaps, used to short the bitcoin price, on Bitfinex.

Pantera also cites the widely held theory that miners are a possible culprit behind the price drop, as those who mine "commercially" have to constantly sell coins to recoup costs and turn a profit.

But the fund also offers two novel explanations for recent price weakness. As Bitstamp was taken offline in the wake of a security breach that saw thieves steal about $5m, bids worth roughly the amount were on its books. These orders were cancelled when the exchange suspended trading. As a result,  Pantera says, the bitcoin price didn't have the benefit of these buy orders as its decline began.

The fund also says that a rise in venture capital invested in bitcoin firms may also have meant that funds normally bound for a direct investment in bitcoin may now be diverted into companies working on bitcoin instead. This translates into less capital sloshing through the bitcoin markets.
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