After the astronomical rise in the price of Bitcoin, many of the investors are actually fearful that there would be a significant crash in Bitcoins. You need to keep in mind that the triggers for such crashes are plenty. Even though, when it was in the movement, none of these causes mattered but in the future, if any of these causes does occur, it can lead to a significant crash as well. This is one of the main reasons why you need to be aware of the causes of these crashes.
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Failure of a major exchange:
Even though most of the exchanges are much more secure these days but any failure in a major exchange can cause a significant crash in Bitcoins. Moreover, there has been precedence in the past as well. Owing to this very reason, if there is any kind of problem with the major exchange, it can lead to a significant crash as well.
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Slow transaction times:
Currently, the transaction time of Bitcoin is much lower as compared to some of the other cryptocurrencies. That is why, Bitcoin is not being significantly used as well. If indeed, the transaction times keep on increasing and the fees also keep on increasing, the value of Bitcoin would actually fall as well. This is due to the fact that the actual usage of Bitcoin would fall as well.
There are already faster cryptocurrency alternatives as well like ripple as well as Bitcoin cash.
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Non-profitable mining:
If due to the recent fall, the mining of Bitcoin actually becomes non-profitable, that can again cause a problem as well. You need to keep in mind that only when mining is done, the Bitcoin network can function properly as well. Therefore, if there is any problem with the mining network, there would be slower transactions as well.
Moreover, when Bitcoins mining is not profitable, the miners would be moving to some other currencies as well. This would cause the network to be slower. When the network is indeed slower, more and more people would be moving away from the network as well.
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Stricter regulatory framework:
Any changes in the regulatory framework can cause a lot of problems as well. If there are more and more rules which are being enacted, then that can cause a problem as well.
Owing to these reasons, the Bitcoins can fall significantly as well. It is up to the investors to understand the risk and thereafter take a call whether they want to still invest in Bitcoins or whether they want to move it to any of the other cryptocurrencies.
Adam Webb is editor in Smartereum, blockchain and currency news, where he produces updates on Blockchain, Ethereum and other alternative cryptocurrencies.
