Bitcoin prices have crashed over the course of this week! According to CoinDesk’s Bitcoin Price Index, the price of one Bitcoin fell to below the $13,000 mark earlier in the day (IST).
After hitting an all-time price high of $19,783 on December 17 (on CoinDesk), the price has been steadily slipping.
At the time of publishing this article, the price of one Bitcoin showed some signs of recovery and stood at $14,234.72, down 8.52 percent in 24 hours.
Further, if one sees the trading volume, it has peaked again since December 8, and stands at approximately $19 billion.
So what does this mean?
Putting your eggs in multiple baskets or cryptocurrencies
We have all heard about this investment philosophy.
Experts claim this price fluctuation is just the market playing out its dynamics. In the past week, we have seen the prices of various cryptocurrencies shoot up through the roof. To give an example, just two days ago, one of the biggest cryptocurrency exchanges, Coinbase’s GDAX, announced adding support for, and allowing users to buy and sell Bitcoin Cash on its platform.
This caused a surge in prices of Bitcoin Cash with trading volumes (24 hour) reaching approximately $12 billion. Even Ripple, the world’s fourth-biggest cryptocurrency, also saw trading volumes reach $4 billion just today.
This is one signal that to hedge their risk of Bitcoins, investors seem to be putting their bets across other cryptocurrencies as well. This could a strong reason for the sharp drop.
Speaking to the Guardian, Neil Wilson, senior market analyst at ETX Capital states,
“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.”
And, this price drop will continue!
A Coindesk article hints that according to price chart analysis, the price of Bitcoins will continue to slip to $11,000 with a reversal point at $11,280, and then could move upward.
Earlier this week, news reports said South Korean Bitcoin exchange, YouBit was looted by hackers. It claimed that 17 percent of its total assets were stolen. This also might be creating uncertainties in the Bitcoin market.
Looking at the cryptocurrency market, today, only Ripple has seen a positive upward trend, with prices seeing an 8.55 percent price increase. At present, Bitcoin Cash and Ripple are battling for the position of the third biggest cryptocurrency in the world. While the collective market capitalisation of Bitcoin Cash stands close to $45 billion, the market cap for Ripple stands at $43.4 billion.
Tarush is driven towards delivering unbiased and accurate reportage while engaging with as many mediums as possible to narrate a fresh perspective. Working for the past few years in the digital space with YourStory, he has covered the Indian technology ecosystem extensively, focusing on new age Fintech companies, while building strong connects within the industry.