Bitcoin dives below $10000 with a 50% decrease in value
Bitcoin, the king of all cryptocurrencies, dropped below $10,000 last night, in the steepest drop-off in value since January of last year. It made waves in the news in early December, with the value of a single bitcoin skyrocketing to an all-time high of over $20,000. The meteoric increase in prize drew countless first-time investors, all hoping to cash in on the cryptocurrency craze. However, with the sharp drop in trading value, many are left with nothing to show for their investments. The steep decline has also affected other major cryptocurrencies, including Litecoin, Ethereum, and Ripple.
In the past few weeks, bitcoin has been steadily declining due to fear of regulation by governments. South Korea announced a few days that they were seeking out ways to regulate cryptocurrencies, with rumors of an outright ban. This sent the market into a frenzy, with many investors selling off their bitcoin and other cryptocurrencies in fear of it’s value declining. South Korea has since dispelled any rumors of an outright ban of cryptocurrency, but the damage to the market had already been done.
Other reasons potentially contributing to the decline in value is China pushing harder on their crackdown of cryptocurencies. Government officials continued to shutdown bitcoin exchanges and moved to ban all new cryptocurrency companies. Russian president Vladamir Putin was also vocal about potential regulation of cryptocurrency, saying, “In broad terms, legislative regulation will be definitely required in the future”.
So is this finally the massive supposed “bitcoin bubble” finally popping? Well, some say not so much. Tokyo-based economist Makoto Sakuma said, “I would say the strong rally in bitcoin and other cryptocurrencies we saw last year is over. But while the rally phase is over, I don’t think it is right to say bitcoin is finished.” According to market charts dating back to 2011, and the very beginning of bitcoin, this is just a simple market correction in January, which has been the case each year since then.
In fact, while many bitcoin investors have seen their portfolios drop by almost 50%, some are seeing it as a chance to purchase more at an incredibly discounted price. I spoke to John Leslie, a crytpocurrency trader who has considerable investments into bitcoin, and he said, “It is never fun waking up and seeing your entire portfolio take an absolute plunge, but in the end, I believe now is the time to buy up more. This is not the end of bitcoin, and if you’re smart, now is the time to get in”.
This is a far-cry from traditional trading, as most people would have sold their stocks to cut their losses, but this is the world of cryptocurrency. With markets this volatile, veteran investors have become resilient to these extreme drops in value, with people like John seeing it as an opportunity.
Despite the incredible gains people have seen in the past few months in cryptocurrency, it shouldn’t be seen as a guaranteed get-rich-quick scheme. Don’t blindly invest in something without doing proper and thorough research, and never invest what you can’t afford to lose. While it has not been a good week for bitcoin, and cryptocurrency as a whole, it is safe to say we will definitely be seeing more news from it in the coming months.