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Potential Massive Devaluation of the Bitcoin

May 2, 2013 at 13:03 by Nicholas Gager

The Silk Road is an online marketplace most well known for its reputation of selling any illicit drug out there and shipping it directly to your home anonymously. The online marketplace is  however one of the biggest driving factors of the Bitcoin economy, with most of the value being given to the Bitcoin by the consumers and businesses operating there.

The Silk Road has for about two weeks now been under the effects of a DDoS attack from an unknown hacker, and on May 1st Dread Pirate Robert, the founder of the Silk Road, and his crew managed to fend off the attack. The night of May 1st after the reopening large numbers of people withdrew their Bitcoins and began selling them on the market fearing another attack.

Since then the price has been steadily falling because of the excess supply with the price starting at about $142 and dropping down nearly $30 to $113. This has a massive implication for the rest of the market; should we experience another attack on the same level as before we could see the price drop back down to below $100 dollars for the first time since the crash earlier this month.

There is however potential for a speculator to make money even in the event of  a crash on this level; the Silk Roads next most prominent competitor Atlantis will become the head of the market should we see a crash like this, and the value of the Bitcoin should return to near normal levels. This potential low point in the value would the perfect time for an investors to buy at the low value and wait for the gradual return.

As of 7:04 CST the value of the Bitcoin is back up to $116.60 from its low of $104 according to Mt.Gox.

If you have any questions and comments on the commodities today, use the form below to reply.

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