Fall of BTC
Traders that bought Bitcoins after last year’s price sour are deeply regretting their moves following Bitcoin prices crash. On December 17, 2017, Bitcoin was trading at $19,783. Compare that price to BTC trading below $4,500 this week.
In the first quarter of 2018 the coin lost over 70% of its value. For the better part of the year, it has been hovering around $6,000. However, Bitcoin suddenly nosedived this week shaking off almost $1,600 of its value and $30 billion of market capitalization. Bitcoin’s crash is also dragging down the value of other cryptocurrencies. Ethereum’s ranking fell to the third place after Ripple’s XRP.
The biggest losers are the investors that joined the bandwagon during the coin’s peak. This group has lost between 45% and over 75% of their initial investment. The coin’s price is proving to be highly volatile and it is becoming increasingly difficult to ignore pessimists’ voices. As reported earlier, naysayers like Jamie Dimon, CEO of JPMorgan Chase & Co. are being vindicated. Dimon referred to Bitcoin as “Fraud” and threatened to dismiss any of his employees that traded the digital assets.
Bitcoin enjoyed a multi-year bull market that ended this year. This upward trend convinced some pessimists that digital currency was here to stay. They faced a choice to join the revolution or clear the path. For Fear of Missing Out (FOMO), risk-embracing retail investors scurried to the digital coin exchanges and invested. As Steve Ehrlich, COO Wall Street Blockchain Alliance says, “It’s easy to dismiss crypto as some sort of fake money that’s only useful for criminal enterprises, but at some point when the price went up by so much, so quickly, people had no choice but to peek under the hood and see what was going on.”
This euphoria came to a sudden end when prices collapsed in the first quarter of the year. However, a majority of the new investors held on to their tokens hoping that prices would return to their highs.
Speculators Second Guessing
Crypto bulls like Tom Lee and Mike Novogratz led the optimists. Novogratz on his part has reconsidered his position recently stating that the coin will not surpass the $9,000 mark by the end of the year. Mr. Lee also lowered his pricing prediction from $25,000 to $15,000. Experts, however, state that the launch of Bitcoin Futures could be responsible for the first crash. Through the futures, pessimists had the change to bet against the token for the first time since its inception.
Bitcoin is under investigation by the Department of justice for allegedly employing market manipulation tricks to boost the value of the coin. A study co-authored by John Griffin, Finance Professor at the University of Texas speculates that Bitcoin investors used the controversial token Tether to manipulatively stabilize the coin. Tether’s leadership has denied the allegations.