Bitcoin Is Down. Is The Party Over?
by jhchen – January 18, 2018
Bitcoin has been on a roller coaster ride over the past year and has seen its value decline by more than half from its all-time highs. Much of the blame for this decline has been placed on China, where the government is cracking down on cryptocurrencies. The country ordered exchanges to halt trading and banned initial coin offerings (ICOs).
While China is an important market for Bitcoin, the cryptocurrency’s drop in value does not appear to have anything to do with Beijing or the ICO ban. Bitcoin’s price is down by about 50% from its all-time high, but other cryptocurrencies have fallen even more precipitously.
For example, Ripple was one of the best performing cryptocurrencies of 2017, with its value rising by 36,000% over the course of the year. However, Ripple has given back almost half of those gains since mid-January. Ethereum and Bitcoin Cash are also off more than 50% from their highs.
Bitcoin Is Down. Is The Party Over?
The price of the digital currency bitcoin took a hit this week after online trading site Mt. Gox went offline, raising speculation that it suffered another big hack.
Mt. Gox has not yet issued a statement about its closure, but the company’s CEO Mark Karpeles has said that he would be willing to discuss the issue with Japan’s parliament on February 25th. This comes just days after Mt. Gox announced that it found a loophole in Bitcoin’s architecture that let hackers steal hundreds of millions from customers’ accounts, which could be responsible for the current outage as well as last year’s massive Bitcoin loss.
The Financial Times reports that the Japanese government has been looking into ways to regulate Bitcoin and other digital currencies, following China’s recent ban on banking institutions dealing with them, but it remains unclear whether Mt. Gox is part of this investigation or not.”
Yes, Bitcoin is down. Yes, the party is over (for now).
Bitcoin has been on a ridiculous tear for the last 12 months. Up 1,000% and then some. Other cryptocurrencies joined in on the action as well – with Ethereum rising to new highs every passing day.
But all good things come to an end at some point; and after such a meteoric rise it was only a matter of time before we saw a correction. The question on everybody’s mind is, “just how much further will Bitcoin drop?”
I think that Bitcoin will probably go down by at least 50%.
The price of bitcoin is down nearly 10 percent today, having slipped to close to $30,000 at around 11:15 a.m. ET, according to Coindesk. It’s not just bitcoin that is down, either. Ether is trading down 8 percent. Dogecoin is down 12 percent. Litecoin is down 11 percent. It seems that no cryptocurrency is safe from the downdraft.
The question now is whether this kind of volatility should be expected as cryptocurrencies become more widely accepted and institutional investors pile into the market. Or has the party only just begun?
It may well be that we’re in correction territory right now — as investors who bought bitcoin at its recent peak of $42,000 are looking for some way to get out of the trade without taking too much pain. That’s certainly what happened in 2017 when bitcoin (and other cryptocurrencies) saw a massive surge in price followed by a sharp sell-off and then a gradual recovery over the next few years before the current bull run began towards the end of 2020.”
Cryptocurrency prices took a dive on Friday, in what is being called the cryptocurrency “bloodbath” of 2018. Bitcoin, the world’s most popular cryptocurrency, was trading at $9,056.30 at 1:03 p.m. ET on Friday, according to CoinMarketCap. The digital currency has lost roughly half its value since mid-December when it reached $19,343.04, which was its all-time high. Other cryptocurrencies have followed suit, with Ethereum — the second biggest digital currency by market cap — down nearly 14 percent and Ripple off 39 percent over the last 24 hours, according to CoinMarketCap.
With bitcoin’s price plummeting from record highs in recent months, many investors are wondering if the party is finally over for cryptocurrencies.
Bitcoin’s value surged by more than 1,300 percent last year and hit a record high of $19,783 in December — just one month after it made its debut on the futures market at $15,000 per coin. Now it appears that bitcoin is falling back down to earth as fears mount that governments around the world will continue to crack down on the use of cryptocurrencies.
Chinese regulators cracked down on bitcoin trading in September 2017 when they banned initial coin offerings — a method of
And it was, until this past week. Starting out 2017 at a price of $997 per coin, bitcoin has been on a tear in recent months, rising above $4,000 at its peak. That’s a fourfold increase in seven months. And the reason for the surge? Many believe it is because of an upcoming software update called SegWit2x that would double the size of bitcoin blocks—and more transactions means higher fees for miners.
But the SegWit2x update was recently put on hold after lacking support from the community and industry leaders. The resulting uncertainty caused bitcoin’s price to plummet: It dropped about 20 percent in just 24 hours on Thursday, and has lost more than half its value since last month.
Now investors are wondering if the party is over for bitcoin. While this latest blast from the bubble may seem like a big deal, many in the crypto community do not seem concerned by it—and predict that prices will soon rebound. One reason why is that developers have agreed to activate another update called Segregated Witness, or SegWit, which would allow more transactions to be processed without doubling the block size.
Bitcoin can be hard to understand, but it’s not hard to see that it is changing the world.
It first took off in 2013, when it was still fairly easy to mine, and we saw an explosion of new users and start-ups, who quickly figured out how to take advantage of this new technology.
So far, all the buzz has been about Bitcoin; but Bitcoin is only one cryptocurrency. There are hundreds of others. Most of them are just copycats, but there are a few with significant differences, which could justify their own value. If you want to know what the future of technology looks like, look at Bitcoin.
It’s worth noting that these technologies have already made some people very rich.