Bitcoin Crash: Should You Worry About the 30% Price Drop?

520

The bigger they are, the harder they fall – the same with bitcoins. Bitcoin falls by more than $3,000, dropping through $13,000 mark.

Follow Nexter to know more.

Dramatic fall

The bitcoins price is unstable again. In the last 24 hours it has dropped by a quarter and not the most famous cryptocurrency is currently trading at $11,858, according to CoinMarketCap (Now it above 15,000 again).

Bitcoin plunged roughly 30% from its record top near $20,000 set at the start of the week.

“The vast majority of long term holders of bitcoin are still way in the money and have shown no sign of cashing out,” Michael Jackson, partner at venture capital firm Mangrove Capital Partners, said in an emailed comment Friday.

“We see the exit of short term speculators and we have seen it before. The fundamentals are still in place and there is no reason why the bitcoin ecosystem should not continue to develop.”

What about the others?

Most of the other crypros also went down.

Their value for thein the last 24 hours:

  • Ethereum is down 27.4 percent,
  • Bitcoin Cash is down 36.3 percent,
  • Ripple is down 6.2 percent,
  • Litecoin is down 29 percent

“Has the bubble finally popped? It’s hard to see the bell tolling just yet. Large price swings have become so normal that it’s hard to decide – we can easily see this market bounce back in very short order,” Neil Wilson, an analyst at ETX Capital noted.

“Whilst there have been some hacks, public infighting in the mining community, lots of rumoured forks  and regulatory pressure building on some fronts, this is likely to be a simple bout of risk-off selling as investors rebalance towards year-end.”

What’s the reason?

Bitcoin is known to go through wild swings. In November, it tumbled almost 30% in four days from $7,888 to $5,555. In September, it fell 40% from $4,979 to $2,972.

“Keep in mind that bitcoin has gone up a lot this year, so a correction is always likely,” said Shane Chanel, equities and derivatives adviser at ASR Wealth Advisers in Sydney.

A sharp drop in bitcoin is attributed to the bankruptcy and closure of the South Korean crypt exchange Youbit because of cyberattacks. Hackers managed to hack Youbit and steal 17% of all assets.

“Trading in bitcoin is akin to gambling, so its movements don’t follow logical patterns,” said Takashi Hiroki, chief strategist at Monex Securities in Tokyo.

“Unlike equities and bonds, it is not possible to calculate expected returns on bitcoin, so buying it becomes a gamble rather than an investment.”

Should we panic?

If all this sounds dramatic, remember that the price of Bitcoin is still up roughly 30 percent since Dec. 1, and 1,300 percent since the beginning of the year. Cryptocurrencies are extremely volatile, and sudden price drops of this magnitude have happened before, and they’re likely to happen again.

See also:

Summary
Article Name
Bitcoin Crash: Should You Worry About the 30% Price Drop?
Description
The bigger they are, the harder they fall - the same with bitcoins. Bitcoin falls by more than $3,000, dropping through $13,000 mark.
No tags for this post.

Comments are closed.

More News from Nexter