The end of 2017 was made up of an incredible rise for bitcoin. Not a week went by without another record smash. Or, another news report of new investors jumping aboard the bitcoin investing train. As it flirted with the $20,000 mark, speculators were prophesying three-digit, and even six-digit highs before long. But perhaps in the least surprising turn of events since the skyrocketing bitcoin shock: in only 24 hours it dipped to a low of unbelievable proportions. This was apparently shocking to investors.
On January 16th, the world’s leading cryptocurrency halved its peak point and fell to a position lower than even $10,000. This is a low not seen since early December. The cause for this steep decline seems to stem directly from proposed regulations popping up around the world. As well as the first set of Cboe (Chicago Board Options Exchange) futures contracts expiring which prompted a sell-off. At this stage, it’s difficult to say whether regulations will cause a long-term fall or rise for the cryptocurrency. They can bring some positive factors to the table. Regulations could steady the volatile nature of bitcoin and negate the criminal element that’s cropped up more and more as cryptocurrencies as a whole have entered the public spotlight. However, the very nature of bitcoin that drew so many investors in was its promise of anonymity. And, its distance from public governments and banks.
Bitcoin hauled itself back up to $11,500 today. But, it remains whether this is the beginning of another long-term growth. Or, if it is merely a “dead cat bounce” in the investing world. This bounce is a temporary, misleading recovery following a decline that leads to an inevitable downtrend. Watch this space for the next move made by the infamous bitcoin!
This article is third-party analysis. It does not constitute any financial advice. That advice can only come from a certified financial adviser.