It was on December 17, 2017, when Bitcoin reached its highest value to date, hitting almost $20,000 and promoting a number of people to take double mortgages on their houses. It was a true, unadulterated Bitcoin rush. Quite the rush indeed, with people getting gripped by the “fear of missing out”, a known economic misconception that will now cost them dearly.
A Danish company predicted in the past that Bitcoin could reach the enviable $100,000 in net value, but this has been dashed as the value of the coin has slipped below what is reasonable. Dashed is the six-figure value of Bitcoin. And dashed are the hopes of many to become instant millionaires.
Of course, there are those who are privileged, moving and shifting their assets left and right, swiftly tanking the market and pumping it right back up, and there are the minnows who spent thousands worth of dollars to get a piece of the action. But is Bitcoin alone? No, we don’t think so. Ethereum started at $1,432 earlier this year, but look at it now – it costs $120 and continues to fluctuate.
It’s yet another cryptocurrency bubble which is seeing the costs drop down significantly, after the previous big crypto slumps in 2011 and 2013, which caused many people to sell in a hurry. But what has occasioned today’s dire results? We may have a few answers.
Supply’s End, Regulators’ Beginning
The market is reaching maturity, most experts agree. As the machines mining Bitcoin are failing to do so, because of the immense, parts-melting power that is necessary, desperate measures are called. People have been caught trying to use nuclear power to mine Bitcoin, a daring and equally amusing way to go about it.
But unless you can hook your own power plant to your mining operation, we don’t see Bitcoin mining becoming easy in a hurry. Of course, it could be said that there are many more cryptocurrencies, and they are also falling in terms of value.
These cryptocurrencies are not dependent on how much you mine and they are easier to obtain, without sacrificing any computing power indeed. Well, it is what it is. But it’s not just about how easy it’s to procure your cryptocurrencies.
Regulation is also intensifying, and that’s proving even more crucial factor. As more regulators and watchdogs are having a closer look at what’s happening with cryptocurrencies, more people are people starting to drop their assets that are denominated in any of the crypto gold.
At the same time, places around the world are quite supportive of cryptocurrencies. For instance, the State of Ohio is embracing cryptocurrencies, allowing taxpayers to settle what they owe to the federal government in the form of Bitcoin.
It’s indeed a rather surprising move, but one that’s very much still on.
The Low End of the Week
It’s definitely been a low point for Bitcoin and cryptocurrencies. As of Friday, November 30, the crypto currency was worth just shy of $4,000. This reaffirms the massive depreciation push in Bitcoin, which should definitely alarm the majority of people involved in the sector.
With this being said, cryptocurrencies will definitely have to find a way to stabilize their offer, or they will risk being buffeted by forces that are beyond them. In fact, this is a valid point. The idea behind cryptocurrencies was to allow people to regain control over their own wealth.
No more government spending, no more covering for stuff we don’t need. However, it has turned out that people who can snap up the largest portion of the supply, i.e. the whales, are not moving the value of crypto gold on a whim.
With Bitcoin’s value dropping 36% in November, we think that things are rather pretty clear and we can’t expect cryptocurrencies to stabilize completely. Not as of now. Of course, China is experimenting with its own national digital currency whereas the United States, disjointed as the legislation can be, the country is making a decisive step towards adopting the cryptocurrency in one form or another.
Is There A Future?
That’s the question. The Bitcoin supply seems to have dried up. A lot of the early enthusiast have left or are too scared to even broach the topic. Warren Buffet has been calling that Bitcoin is a scam alongside many other savvy investors.
Now that governments are showing interest in Bitcoin some form of it may succeed, but that’s not entirely certain. Financial markets seem to have very little use of it, and we’re not entirely certain if that will work out at all.
Still, the value of Bitcoin is not beyond salvation. Similar events occurred both in 2011 and 2013 and while there are people buying, trading and showing the slightest interest, the cryptocurrency is safe, just not worth very much right now.