The Bitcoin Bubble is Bursting

  • The Bitcoin Bubble is Bursting

The Bitcoin Bubble is Bursting

At this point last week, the price of Ethereum, the second most valuable cryptocurrency, was approximately $1,200; a slump on Monday saw it fall to a low of $800 on Wednesday before pushing through the $1,000 threshold again, and reaching $1,030 a day later.

Despite this, it later fell below US$9,200 - representing a 53% drop since it peaked close to US$19,800 over a month ago. These range from concerns about potential bans on trading in the key markets of China and South Korea, to withdrawals to pay for Chinese New Year celebrations, hedge fund market manipulation, the introduction of futures and just general profit-taking.

"There is a lot of panic in the market". "I don't get it", he said.

During the North American Bitcoin Conference, a cryptocurrency conference, there was talk about a global crackdown on cryptocurrency markets.

Meanwhile, more signals about a possible ban on cryptocurrency exchanges are coming from South Korea.

Tech-savvy young investors, real estate players and jewellers are among those invested in bitcoin and other virtual currencies, tax officials told Reuters after gathering data from nine exchanges in Mumbai, Delhi, Bengaluru and Pune.

"Cryptocurrencies could be capped in the current quarter ahead of the G20 meeting in March, where policymakers could discuss tighter regulations", said Shuhei Fujise, chief analyst at Alt Design.

Jimmy Song, a Bitcoin developer came up with the idea of purchasing smaller fractions of entire Bitcoins, and has proposed that one millionth of a Bitcoin should be called a "Bit". Many believe that there was an event that occurred that is the cause of this recent drop in price, given that the market is so heavily based on speculation.

"The volatility of bitcoin - and other cryptocurrencies - is an expected, and important, part of the journey to becoming a mature asset class". Cryptocurrency markets are notoriously volatile, but because South Korean investors are so influential, Park's buzzkill comments contributed to a global sell-off.

Ripple, the third-largest, has lost 25 percent of its value over the past 24 hours and was quoted at $1.03, down from a high of $3.81 on Jan 4.

Cryptocurrency remains a volatile and unregulated market, though, and buyers must not invest more than they are willing to, or can afford to, lose.

On 18 January 2017, Bitcoin was trading at $901.

However, as governments all over the world begin cracking down on Bitcoin and other cryotocurrencies, their value began to decline. At the time of writing, Bitcoin was trading at $11,600 while Ethereum was at $1095.

"This is far from guaranteed given the existence of alternatives with better characteristics".