The sharp decline in the price of bitcoin has shocked many users of the digital currency. Nikolai Kolesnikov, Chief Technology Officer of, argues that the fall of bitcoin is based on the combination of several factors. One of these factors has a name: Bitstamp.

Nikolai Kolesnikov has observed the bitcoin market for a year and does not feel the need to dramatize the current drop in price.

ThePrice of bitcoin fell rapidly in the last two days. In the morning of January 14th, the digital currency slumped to record lows of $195 for one bitcoin. Later, the digital currency gained back some value, but the market remained in obvious shock.

“There are three things which exert their pressure over the price. The first important factor is Bitstamp. The successful attack against this exchange frightened veteran users, who still remember the collapse of Mt. Gox. Bitstamp clients started to close their positions. They did not move their bitcoins to BTC-E or BTC China or any other exchange, but sold their digital currency. This obviously influenced the market,” notes Kolesnikov.

The second important factor in the bitcoin tumble is the expansion of the bitcoin infrastructure. “The number of exchanges and trading platfroms that use bitcoin is growing rapidly. They allow common users to change their bitcoins into fiat money very quickly. Many people who hope to make some profit from bitcoin are closing their positions. The number of bitcoins available on the market is constantly growing,” the Coinfox CTO says.

The third factor in the bitcoin slump is mining. “The growing scale of mining exerts its pressure on the market. Cloud mining opens the market to many people who want to make bitcoin without leaving their homes. Chinese companies manufacture the hardware to mine bitcoins and mining becomes more and more popular. This again, leads to the decline in the price of bitcoin”, says the expert.

According to Kolesnikov, the current slump won’t be “the end of bitcoin”. “The most important thing is the technology. One can use Ripple or Colored Coins without worrying about what the price of digital currency is. Some banks have already started to experiment with this technology”, notes Kolesnikov.