If you were waiting for a fall in the exchange value of Bitcoins, then your patience has paid off. The Bitcoin bubble appears to have burst, at least for the moment. The value of the digital currency fell from its previous $260 to $130 in just one day—a crash of 50 percent. The exchange rate later stabilised to $160, and at the time of publishing, is around $158.
While there is no clear explanation for the crash, the market might simply be correcting itself after a huge rise. However, another theory is taking hold now: the plunge in value comes hours after a Reddit user going by “Bitcoinbillionaire” suddenly decided to give away around $12,000 worth of Bitcoins to random Reddit users. Bitcoinbillionaire rewarded 13 redditors before ending his generous spree some eight hours after it started.
Has the bubble burst?
Using Reddit’s Bitcointip mechanism, the mysterious Bitcoinbillionaire gave away 20 BTC, worth around $3,200, to redditor Karelb. This gift happened under a thread titled: “I wish for the price to crash,” which has prompted Bitcoin watchers to draw the inference that it is somehow related to the drastic fall.
ArsTechnica’s investigation into the account transferring the Bitcoins shows that a couple of hours before the giveaways began, Bitcoinbillionaire received 50 Bitcoins (nearly $10,000 at the time) from another account.
A report by Business Insider notes that Bitcoinbillionaire could have been an "early adopter" who had forgotten they had any Bitcoins. However, Bitcoinbillionaire has since vanished from Reddit without a trace. "You've made me change my mind about this whole thing," Bitcoinbillionaire wrote, before signing off with "I'm done."
However, the cash is now being “paid forward” by the beneficiaries in an act of kindness. According to a calculation, Bitcoinbillionaire gave away Bitcoins to the tune of nearly $13,000 (approx Rs 715,000).
Redditors have taken to the post "Hold Spartans" to vent their frustration about the fall in value, but there have been some sensible responses too. "This is just the market venting some pressure after these huge gains," wrote redditor anotherblog. "To be honest I'm glad it's happening now. If it recovers, it will demonstrate resilience in the market and give confidence to future buyers and current holders that they don't need to panic sell, reduce the chances of a crash in the future."
Published Date: Apr 11, 2013 05:19 pm | Updated Date: Apr 11, 2013 05:19 pm