Whenever cryptocurrency enters the news cycle, it’s rarely good. After all, while the pros of using cryptocurrency are great, the cons lend the currency to controversy and trouble, both financially and reputably.
Earlier this week, controversy plagued Bitcoin once again as the value of the cryptocurrency fell to a staggering low, and even though the fall was temporary, it paints a picture of the unreliability cryptocurrency presents.
That’s a whole other article though, so let’s focus on the events of this past week. How far did Bitcoin fall, why did it fall, and can we expect it to happen again?
The Bigger They Are, the Harder They Fall
Bitcoin’s value history resembles a heartrate monitor on the fritz: bumpy, unpredictable and overall filled with highs and lows. Sure, you can say this about many currencies past and present, but no currency has matched the volatility of Bitcoin.
Unless you live under a rock, you’re probably aware of the value surge Bitcoin–and coincidentally every other form of cryptocurrency–went through in 2017, reaching a peak of $17,549 for one Bitcoin.
What followed is reminiscent of many celebrities: they hit their peak career-wise, eventually fall off and never re-attain their peak status.However, Bitcoin spent all of 2017 and some of 2018 in the limelight, hovering in the tens of thousands of dollars, garnering a large cult following.
As predicted by many, cryptocurrency fell off and, while it retained a cult following, it hasn’t experienced a resurgence, and after this past week? Well, we may not be seeing one anytime soon, as Bitcoin fell to a staggeringly low $8,000 this past week.
Lowest it’s ever been? Not by a long shot. However, $8k holds the title of “lowest value of 2019 since June”. But why? Is this just a symptom of Bitcoin’s increasing volatility, or is there a reason behind this plummet?
Bitcoin has in fact fallen victim to a couple outside influences: Bakkt and Litecoin. Bakkt is a new crypto-platform released earlier this week, and Litecoin is a form of cryptocurrency. Now that you’re in the know, I bet you’re wondering how these two things played a role in Bitcoin’s fall.
First off, Bakkt didn’t favor Bitcoin, instead opting to favor other cryptocurrencies such as Ethereum, XRP and, you guessed it, Litecoin; while these cryptocurrencies surged in value, Bitcoin remained stagnant, eventually falling to the $8k low that inspired this article.
As of writing this article, Bitcoin is hovering around the $8k-$9k range, though I’m sure it’ll escape soon; lower or higher though, that’s a good question.
Probability of Value Dropping Again
It will most definitely drop again; volatility is the one of the reasons cryptocurrency hasn’t taken the world by storm yet and replace actual currency.However, crypto-enthusiasts expect Bitcoin to experience another value surge soon, due to the scheduled “halvening” next year (when rewards for crypto-miners is halved).
However, that surge is a long ways off and theories are just that: theories. Now, when it comes to dropping in value, it also will most definitely happen again. Just last October, Bitcoin dropped to $6,300, so I have no doubts Bitcoin will reach near that before the halvening. Again though, I’m just theorizing.
Theorizing is all you can do when managing cryptocurrency. Many mine Bitcoin in the hopes of becoming growing their wealth, but the only thing growing is their electricity bill. Some are able to make a decent income off of it, but we’re talking the top 1%.
Bitcoin made a splash this week, but in the end, the news isn’t surprising, unique or that big of a deal; if we made note of every time Bitcoin fell in value, we’d have an article about it every week. However, just like the VPN on my Chrome browser, I like to simply acknowledge Bitcoin’s existence and let it do its own thing without any interference from me.