By Michael B. Cohen
Vice President of Global Operations
Cryptocurrency is known for its volatility, but even veteran crypto users were shocked by the staggering fall in bitcoin price to below $16,000 the first week in November 2022. The bitcoin loss was staggering – on November 9, it dropped to $15,717, its lowest point ever since the bitcoin comeback during the pandemic in 2020.
Fluctuations in bitcoin price are nothing new, and crypto investors have been in for a wild ride. Even though bitcoin is the oldest cryptocurrency and is considered to be relatively less volatile than other coins, it has definitely taken crypto traders and users on a rollercoaster ride. The volatility of the crypto coin along with bitcoin scams makes bitcoin particularly risky.
Bitcoin has been around since 2009, but it surged back into popularity in 2020 during the pandemic. From a level of around $15,000 in early 2020, it surged to a high of approximately $60,000 in the spring of 2021, fell in the summer and rose to its record high level of $68,000 on November 10, 2021.
Bitcoin price hasn’t broken the $50,000 barrier since December 25, 2021, having suffered a selloff during crypto winter, but was at a respectable $30,000 level in early summer of 2022. However, it fell to $20,000 by mid-October, and the FTX-Binance deal was responsible for its falling under $16,000.
Whether the bitcoin price is high or low, bitcoin scams flourish. When bitcoin prices are rising, a bitcoin scam will encourage people to buy with the promise it will reach record levels. When there is a bitcoin loss and price drop, bitcoin scams will tell people to buy on the dip for maximum returns.
What Caused Bitcoin’s Price Collapse?
There are often many factors when dealing with bitcoin loss, but in November 2022, the main catalyst was the abrupt ending of the FTX-Binance deal and the resulting FTX collapse.
Basically, it came to light that FTX was running a bitcoin scam. Binance offered to buy its competitor because of FTX’s liquidity woes. Then Binance did due diligence and discovered the source of the liquidity problem was the fact that FTX’s CEO,Sam Bankman-Fried, was shuffling funds from FTX customer accounts to his hedge fund, Alameda Research, and was being investigated by the SEC.
Binance realized that FTX was a bitcoin scam and immediately sold its FTT tokens that were used on FTX. Others followed Binance’s lead and the fall of FTT meant FTX’s collapse and bankruptcy.
As news of the FTX bitcoin scam circulated, more people sold their stakes in FTX and FTT tokens. This brought bitcoin and other cryptocurrency prices down with it, to the point where the bitcoin loss was a two-year low.
How the Price Fall Can Bring Bitcoin Scams to Light
As with the FTX collapse, bitcoin scams can be exposed because of a fall in bitcoin prices. Just as Binance selling of FTT tokens led to more and more panic selling, when bitcoin prices drop, people want to sell their stakes quickly before it drops further.
In the midst of this panic selling, clients of bitcoin scam brokers and fake exchanges want to withdraw their funds. Even in the best of times, no bitcoin scam wants to allow customers to withdraw their funds because they are using client funds for other purposes.
With more selling, bitcoin scams are exposed for what they are because they will refuse to allow withdrawals. They may not have the money anymore because they used it for other operations or maybe they spent it.
At this point, customers need bitcoin recovery and may need outside help to get their money back from bitcoin scams.
Do You Need Bitcoin Recovery?
If your crypto broker or exchange won’t let you withdraw funds, that is a strong indication you are dealing with a bitcoin scam. You can file a complaint, but if they aren’t regulated, you need to go right to government regulators or law enforcement. This can be a daunting task but is often necessary to get a bitcoin chargeback.
Is a Bitcoin Chargeback Possible?
The term “chargeback” is usually reserved for credit card chargeback. When your card is lost or stolen and there are unauthorized charges, you ask the issuing bank for a credit card chargeback. Crypto transactions recorded on the blockchain can’t be reversed. Instead, you should find bitcoin recovery services to help you track down and get the authorities involved in the bitcoin chargeback process.
How Bitcoin Recovery Services Can Help?
Although no one can absolutely guarantee bitcoin recovery, bitcoin recovery services can nonetheless give you the tools to approach authorities with a compelling claim. Experts can investigate your case and discover leads and other information that will help law enforcement find the people behind the bitcoin scam. These investigation reports are crucial for success in bitcoin chargebacks.
MyChargeBack Will Investigate Your Crypto Case
If you have lost money on the blockchain through unregulated brokers, bitcoin wallet hacking or fake merchants, talk to the MyChargeBack team. Our crypto investigations will provide evidence to bolster your claim.
MyChargeBack has developed working relationships with law enforcement agencies worldwide, have extensive knowledge and experience with crypto tracking and can improve your prospects of getting your funds back.