Bitcoin’s Price Has Imploded, and is Now at Two Month Lows
Bitcoin’s speculative bubble seems to have burst, with the cryptocurrency now having lost more than half its value:
Crypto investors are seeing red this week. Bitcoin plunged to two-month lows on Thursday, dipping below $9,000 for the first time since November. At the time of writing, Bitcoin had bounced back up to the $9,200 level, down from weekly highs just above $12,000. This week has seen coins across the board in the red — a sign that investors are jumping ship to fiat currencies this time instead of swapping into altcoins as we’ve seen in the recent past.
At the time of writing, the total cryptocurrency market cap weighed in at $459 billion, down from January highs around $830 billion. It’s a contraction to be sure, but not a low for the last 30 days (that low came on January 18).
So what’s causing the slide to begin with? As usual, no one thing can be blamed for Bitcoin’s current downturn, but recent skittishness around a subpoena for Bitfinex and concerns around Tether — a kind of cryptocurrency counterpart to USD that matches the dollar one to one — probably factor in. Recent news that Facebook would ban ads for ICOs probably didn’t help either. And it seems like every day a new Ponzi scheme gets busted, throwing yet more doubt on the credibility of plenty of less than legit ICOs.
Even beyond news cycle highs and lows, Bitcoin has seen a few mid-January dips before, though 2017’s Bitcoin behavior certainly broke from any seasonal patterns of the past.
Here’s a clue; the crash is happening because bitcoin is a bubble asset that is being bid up by heavily speculation, and now the speculators are pulling out. Just like housing last decade and oil in the last few years, bubbles never last forever.