Cryptocurrencies are like lottery tickets that might pay off in future | Kenneth Rogoff
The likes of bitcoin may well be worthless, but there’s a chance they will be valuable someday
With the price of bitcoin down 80% from its peak a year ago, and the larger cryptocurrency market in systemic collapse, has “peak crypto” already come and gone? Perhaps, but don’t expect to see true believers lining up to have their removed just yet.
At a recent conference I attended, the overwhelming sentiment was that market capitalisation of cryptocurrencies is still set to explode over the next five years, rising to $5-10tn (£4-8tn). For those who watched the price of bitcoin go from $13 in December 2012 to roughly $4,000 today, this year’s drop from $20,000 is no reason to panic.
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bitcoin’s price suffered more losses on Friday following Thursday’s drop and subsequent rebound, plummeting 25% in a single day.
While it appeared that bitcoin had regained its historic upward momentum following , Friday proved even more turbulent as prices dived $600 from $2.5k towards $1.9k. As of Saturday afternoon, bitcoin’s price appears to have stabilized around $2.1k.
What Goes Up, Must Come Down
bitcoin’s price drop follows a week of unprecedented growth, in which from $2000 to an all-time high of $2800. Many claimed that a correction was overdue and that bitcoin is back on its way towards $3,000.
Others have issued dire warnings of a bitcoin bubble that may just now be popping. Older investors can still recall the sting of bitcoin’s infamous 2013 crash (and subsequent destruction of the ), and are wary of repeating the same mistakes. bitcoin’s price also has of spiking suddenly before crashing to a higher, more stable level.
Friday, Bloody Friday
Traders have historically used Fridays to sell off securities or place shorts, anticipating a price drop come Monday morning due to what has been called “. The upcoming long weekend combined with Thursday’s high volatility likely fueled a large sell-off in the cryptocurrency market. bitcoin’s influx of new investors following its price increases may have also spurred a panic sell.
Long weekend, no fiat, exchange issues. I’d call a bottom at $1900 UNLESS and exchange goes bust or something like that.
— Vinny Lingham (@VinnyLingham)
You Bought the Ticket, Now Ride the Coaster
Experienced traders have continuously warned new investors about bitcoin’s notorious volatility. In chastising those who bought at the top on FOMO (“fear of missing out”), had some choice words to share:
Now here’s the question: did you buy bitcoin just because it was worth a certain amount of dollars, or did you buy it to hold a piece of the action? This is a piece of the action. Roller coaster to the moon has its ups and downs.” – zomgitsduke
was created by claiming to have dumped $45k into BTC at its top. He intends to exercise discipline and hold:
“Genuinely don’t give a s— that the price has corrected/crashed/whatever you want to call it. It’ll be back sooner or later. bitcoin is long term. Don’t weep.” – thesilentwitness
Despite these recent setbacks, many are still confident that bitcoin’s run isn’t over yet. The market appears to remain Bullish as traders look to buy in on the massive price dip.
Do you think bitcoin is headed back up? Or do you think that the bitcoin bubble has finally burst? Tell us in the comments below!
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