It’s often been said that investing in cryptocurrencies is not for the faint-hearted, and in the past few weeks this statement has been proven true. Bitcoin has been on a rollercoaster ride whose direction has been difficult, if not impossible, to predict. After hitting its yearly low just days ago, it showed signs of recovery to reclaim $4,000 and looked set to gain even further. However, the rally was short lived as the currency shed 7 percent today to trade at $3,750. The entire market saw a wave of red, with Bitcoin Cash and EOS experiencing double-digit losses.
Word of mouth sent cryptocurrency investment to an all-time high at the end of last year, and Coinbase capitalized on it big time. As one of the easier sites on which to start buying crypto, it should come as no surprise that Coinbase was the platform of choice for thousands of new investors. Coinbase experienced a surge of investors like never before last winter, taking in 43% of its annual revenue in December alone.
The cryptocurrency markets are treading water right now. Bitcoin has continued its downtrend, slipping even closer to the US$10,000 mark. And with a few exceptions, the other markets are following at its heels, as portfolios the world over are turning red.
Update: This article was drafted on 12/30/2017 in response to a dip in market trends. On its date of publication (12/31/17), the market has experienced an uptrend.
On the Come-Down
Plenty of folks, especially here in the States, went to bed with the unpleasant knowledge that Bitcoin was struggling to retake US$14,000.
Mohammed A. El-Erian and Roger McNamee are in agreement: as we enter the new year, the Bitcoin market is at a critical point in its development. In separate articles, both financial experts expressed their beliefs that, following a meteoric rise in 2017, the near future will define how history views Bitcoin in hindsight.
Time for a New Paradigm?
“[In] the waning days of 2017,” Mohammed A. El-Erian writes in an op-ed for Bloomberg, Bitcoin’s “market is at a crucial juncture.
The overall cryptocurrency market seems to have stabilized after a correction that lowered its total capitalization to below US$450 billion last week. That said, the market has yet to convincingly bounce back to pre-correction levels, as its market cap continues to drift between US$500 billion and US$600 billion.
The Bears are Back
November and December saw record highs across most cryptocurrency markets.
The general consensus throughout the Bitcoin community in anticipation of the launch of Bitcoin futures was one of uneasiness and uncertainty. Many individuals announced they were selling Bitcoin prior to Chicago Board Options Exchange’s Bitcoin futures trading launch today, and many technical and fundamental analysts alike expected a sizable drop in response to this Bitcoin milestone.
While the introduction of Bitcoin into mainstream futures exchanges is a milestone for the cryptocurrency, many speculators feared Wall Street had pumped Bitcoin price up to recent all time highs last week, in order to dump today while shorting CBOE’s Bitcoin futures.