The Bitcoin price broke through the next barrier today at 07:24 (GMT). The Bitcoin price dropped below 200 dollars in the early morning hours and reached a low we haven’t seen since the end of 2013.
In just 5 minutes, the price crossed the 200 mark and promptly fell to 185 US dollars. 15 minutes later the rate was 179.13 US dollars. This price is very significant because the Bitcoin in the Chinese currency has also fallen below the magic 1,000 yuan mark, a currency in which 65% of all Bitcoins are traded. Currently (11.40 a.m.), the Bitcoin price is 196 US dollars or 171.96 euros.
The last time the Bitcoin evolution price fell below the 200 mark was in 2013, but shortly thereafter the Bitcoin price exploded to an all-time high of $1,100.
Such a price collapse as we see it now was last after the Mt.Gox bankruptcy in February 2014. At that time the price per BTC fell to below 500 US dollars.
One can only dream of such purchasing power at the moment, while the Bitcoin miners are currently prospecting 25 new Bitcoins every 10 minutes and the payment processors are exchanging all Bitcoin payments directly into Fiat currencies in order to hedge against exactly such a price drop.
The price drop has not only a psychological effect on users and speculators, also the press which Bitcoin already wanted to talk dead in the last years rushes to this historical event.
Even though the Bitcoin price was primarily the focus of market observers in the last few days, the hash rate also suffered a massive drop. The hashing power dropped from 358,478,281 GH/s to 229,513,534 GH/s late Tuesday evening. Later, however, it levelled off at 300,000,000 GH/s.
The problem is clear – the combination of a low price and a high difficulty level no longer makes mining profitable. The current difficulty is 43,971,662,056.09 and was adjusted only a few days ago. This means it will take at least 2 weeks until a new difficulty is issued.
Now everything depends on the time between the blocks which rose to 12 minutes last night. In the morning it was 11 minutes. If even more miners decide to pull their plug, this time will continue to rise and this will result in an even longer period until the next mining difficulty.
So the miners have a hard decision to make. If they continue digging, they may incur losses, but if they stop mining, it will take even longer until a presumably lower level of difficulty occurs.
How will the Bitcoin price develop further?
The miners who decide to continue mining will probably be forced to sell their freshly mined Bitcoins directly. No matter at what price, as long as a part of the costs can be compensated. This will increase the supply of cheap coins in the short term and further depress the Bitcoin price.
If a significant number of miners decide to shut down, the difficulty will be reduced, but it will take weeks.