Bitcoin Craters, Loses Large Chunk of Value
A nineties-era Fox Trot comic featured Roger Fox, quitting his job to spend more time with his family, about to try his hand at day trading. His 10-year-old son—a consummate science nerd—Jason sets up his trading account, and notes that he can even trade on margin, calling it a “foolproof” plan. At least, until Roger points out that that doesn’t work if the stock price goes down. To which Jason replies “Stocks can go down?”. Some bitcoin investors might have felt that way as well, until bitcoin started a precipitous crash last night, shedding almost $3,000 in around two hours at one point.
While it recovered somewhat in trading on Friday, it’s nowhere near the $19,000 of even a couple days ago. In fact, such a catastrophic drop was enough to signal trouble to bitcoin investors, who find themselves now deeply concerned that a truly serious crash in bitcoin could be in the cards.
Looking at a price chart covering just 10 hours of bitcoin trading on Friday, meanwhile, shows a chart that looks like a topographical map of the Andes, with peaks and valleys established very few minutes. There doesn’t seem to be any clear reason for the selloff; some suggest that major movers in the market made some sales, or profit-taking might have gotten involved, or even some folks were looking for a few extra dollars for Christmas shopping.
After reports emerged not so long ago that some people were mortgaging their houses to buy bitcoin, it’s the kind of news you certainly never want to hear. While the price drop is sufficiently massive to be noteworthy, it’s worth wondering if this is just part of natural ebb and flow, or if this is the beginning of the end for bitcoin. Certainly some profit-taking was to be expected; at some point, some folks had to figure “enough’s enough” and pull out. This kind of value loss, though, is awfully pronounced to be just profit-taking and smacks of an institutional move.
Given that some of the biggest names in bitcoin were recently spotted selling off, though, one wonders if this could be the beginning of the end indeed. Still, though, the whole cryptocurrency market will bear watching for some time; there/s more out there than just bitcoin, after all.