What’s Behind Bitcoin’s Big Price Drop?
Back on December 17, when bitcoin reached its all-time high of $19,783.21—or so close to $20,000 as made little difference—it looked like the bitcoin market could do no wrong. At least, until about December 19, when the bottom began to drop out. Since then, bitcoin has lost about half its value—we’ve been hearing almost as many “bitcoin low” days as we heard “bitcoin high” days back in October through December—and that’s got plenty asking what’s behind this drop, and will it ever stop?
The latest events over the last month or so have been major hits to the overall value of bitcoin. There are some serious problems for bitcoin, indeed, the cryptocurrency market that are making weak hands fold and making even strong hands question whether they’ve got sufficient juice to beat a house that, for all we know, is sitting on a five-spade royal flush.
So what’s punched bitcoin—and a large part of the crypto market—in the gut? Regulations have been a huge part; regulators making unpleasant noises in India, South Korea, and even in the United States somewhat have sparked concern. Then there’s been some bad acting on the part of cryptocurrency exchanges; a subpoena is still outstanding at Bitfinex, at last report, and there have been issues of the Tether cryptocurrency potentially fueling price inflation for bitcoin proper.
There’s even some report that it could just be a matter of too much hype; people eager to get in on “the next bitcoin” may be spiking some prices, and there’s been some significant regret as a result. Remember that back around mid-December, we were hearing about some people who were taking out mortgages on their homes to buy bitcoin, a point which might well have actually spooked a few investors thinking that this was the “everybody” phase of the bubble and it was time to bail out accordingly.
Of course, as is the case with any market move, this is largely speculation assembled by watching trends and drawing conclusions accordingly. It’s clear that the bitcoin market—and every other cryptocurrency—has been hit hard lately by potentially several factors. Whether you’re considering this an opportunity to jump in for a discount or time to run for the exits, though, is largely up to you.