All of the above factors are causing price to skyrocket. And with prices changing minute-to-minute, more casual sellers start hanging out waiting for the prices to peak before they sell.
You can clearly see this in the latest price spike. After the price peaks, sellers return the market and consolidate their profits.
Historical Rate chart of BTC and AUD
Updated: 23 Oct 2020 08:30:38 UTC
A cause for concern?
That cycle can drive an extraordinarily fast price rise, regardless of the actual quality or viability of bitcoin (or anything else that falls into the same cycle). It's also self-driving and the faster prices rise, the faster they'll often keep rising.
Of course, a bitcoin is only worth anything if you eventually sell or spend it. Simply holding onto bitcoin forever is pointless.
But the rising popularity of bitcoin hasn't seen it become more widely accepted as a payment method. It's actually had the opposite effect. Fewer merchants accept bitcoin now than they did a few years ago.
If bitcoin doesn't become widely accepted as an actual payment method, the only way to get a return on investment from bitcoin is to sell it.
More sellers naturally pushes the prices downwards, and once you get prices on a downswing any bitcoin buyers are more likely to wait until it bottoms out.
The exact same process that's been pushing bitcoin prices upwards so sharply can just as easily push them downwards if the bubble bursts.
This information should not be interpreted as an endorsement of cryptocurrency or any specific provider,
service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and
involve significant risks – they are highly volatile and sensitive to secondary activity. Performance
is unpredictable and past performance is no guarantee of future performance. Consider your own
circumstances, and obtain your own advice, before relying on this information. You should also verify
the nature of any product or service (including its legal status and relevant regulatory requirements)
and consult the relevant Regulators' websites before making any decision. Finder, or the author, may
have holdings in the cryptocurrencies discussed.
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