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Originally posted 18th June 16
About couple of days ago the Bitcoin price fell about $100 within the span of five hours. The prices dropped about 15% and reached the low price of $551 on CoinDesk BPI (Bitcoin Price Index). This move represents the continuation of recent price correction that started when the bitcoin hit the high level of $774 on the 18th of June. This was the movement that according to many market observers indicated that bitcoin was “overbought” after it reached the two year high.
Market observers continued to voice such sentiments after the sharp price drop in price of Bitcoin couple of days ago. George Samman, a blockchain consultant and advisor indicated that the value of bitcoin increased too quickly this month and therefore the price support was weakening.
Still, the sources suggested that this decline was a response to increasing likelihood (just before the referendum) that United Kingdom was going to vote to stay in EU. These comments show the commonly held belief that bitcoin is safe haven asset which benefits from the times of uncertainty in which the strengths of bitcoin as investment vehicle are best displayed. For example, many traders had expressed their opinion that Brexit vote and the economic uncertainty in China are the major factors that had propelled the price of bitcoin to its 28 months high this June.
Arthur Hayes, CEO and co-founder of BitMex; Vinny Lingham, an entrepreneur and investor; and Tim Enneking, the chairman of the Crypto Currency Fund, all were of the opinion that the Brexit vote would be the defining influence on decline. According to Hayes, the drop in the value of Bitcoin below $600 showed that there were many traders who believed that Bremain would prevail. At that time the vote was very close to call and there were various polls indicating Bremain and Brexit in dead heat. Hayes made the prediction that Bitcoin could linger around $550 in case UK voted to stay a part of the European Union and the value of Bitocoin could reach $700 if UK voted to exit the European Union. Samman was of the opinion that the Bitcoin prices could linger around $550 after the referendum. He predicted that the referendum would be an important indicator of confidence which could determine the future movements of price. Still a more positive stance was taken by Lingham. He asserted that optimism was going to prevail after the Brexit vote and prices would return to $600 - $700 range. Of course this prediction by Lingham came out to be true after the Brexit vote.
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