Bitcoin breaks through 500 mark and then plummets

     This Thursday, Bitcoin, which had been in a crazy month, experienced a cliff-like decline.

     Bitcoin hit the $500 mark yesterday after doubling since September. The last time Bitcoin reached this price was in August last year.

     However, the speculative nature of the Bitcoin market means that it is also a highly volatile market. On Thursday morning Beijing time, the price of Bitcoin fell sharply, with a large amount of selling pushing its price down 26% to $368.

     After falling below $200 in January this year, the Bitcoin market fell into a period of silence, but since September the Bitcoin market suddenly started up again, rising by 100% in one month .

     Most analysts believe that the current rise in Bitcoin is mainly driven by blockchain technology. As a derivative of blockchain technology, Bitcoin's authenticity and transparency have attracted the attention of many investment banks and financial institutions. Xiao Lei, chief researcher of Golden Wallet, said that recently major investment banks and many financial institutions around the world have been paying attention to blockchain technology. This technology itself was developed from the Bitcoin market, and this expectation has certain support for Bitcoin demand expectations.

     In addition, the positive news that the European Union recognizes Bitcoin as a currency and exempts it from VAT may also be an inducement. Some analysts also believe that the strengthening of capital controls by the Chinese government may stimulate the rise in the value of Bitcoin, because some wealthy people want to use Bitcoin to transfer RMB out of China.