Bitcoin has tanked. The world’s number one cryptocurrency by market cap has fallen all the way from around $40,000 just a few weeks ago to about $31,000 per unit at press time. While this has all happened before during the month of January, this time around feels somewhat different.
Bitcoin Is Falling Into Oblivion
The currency has lost about ten percent in the last two days. Just yesterday, the asset was trading for around $34,000, which means it has lost another $3,000 off its most recent price, and the rest of the crypto market appears to be following suit. Other currencies such as Ethereum, Litecoin and Ripple’s XRP have all dropped down by roughly five to ten percent at the time of writing, and it is estimated that approximately $100 billion or more may have been shaved off the entire crypto space.
Ethereum, which had recently attained a new all-time high of approximately $1,439 per unit, has shaved about nine percent off its total value and is now selling for about $1,182 at press time.
Some analysts appear confident that this is a natural correction of sorts. Michael Sonnenshein – CEO of Grayscale Investments – explained in an interview with CNBC:
From 2016 – 2017, we experienced six corrections of approximately 30 percent or more on the way to new highs… Who’s to say whether we’ve seen the bottom of the correction, but at Grayscale, we know that there continues to be a flurry of demand, especially from institutional investors who have longer term holding preferences.
Anthony Scaramucci – founder of Sky Bridge Capital – also mentioned that bitcoin, while it’s been doing rather well as of late, is still vulnerable to price swings and remains as volatile as ever. He commented:
I think you’ve got to accept there’s a tremendous amount of volatility in bitcoin, and it’s still in early stages. Imagine Amazon and Jeff Bezos and a few venture capitalists are still holding most of Amazon, and the company is experiencing explosive growth, exponential activity. If you look at Amazon in the first three years, you saw 50 percent drops in price. Bitcoin’s moves are akin to that because you’ve got close holders of bitcoin that are releasing bitcoin to the marketplace and the buying stability is shoring up, but it’s still not 100 percent there.
Another Link to Criminal Activity…
Interestingly, the bitcoin dip is occurring right after Janet Yellen – the person slated to take over for Jerome Powell as the new Secretary of the Treasury – commented that she’s potentially looking to curb bitcoin and crypto activity in the coming months due to its alleged affiliation with criminal behavior such as money laundering and terrorist funding.
It’s quite funny how no expert in finance can come up with a newer or more original argument regarding reasons to limit bitcoin’s breadth and use.