Bitcoin Bounces Back Above $16,000 After Major Fall
In what some called a Boxing Day 'miracle,' Bitcoin surged back in value after its biggest drop ever over the weekend. The price of bitcoin came back more than 10 percent early on Tuesday to almost $16,000.
The cryptocurrency took a massive hit, falling rapidly from its all-time high of $19,843, just as fans and investors hoped it would crack $20,000.
While it's tempting for most investors to breathe a sigh of relief after the recent uptick, many aren't entirely optimistic that the rise will continue.
Craig Erlam of the firm OANDA expects that 2018 could have more drastic swings in pricing and value of bitcoin, ethereum and other cryptocurrencies.
"Bitcoin is going to continue to fascinate traders heading into the new year and while volatility by its own standards has been tame today, it’s likely to remain very active," he said in an interview with the Guardian. "Speculators appetite for Bitcoin has been tested in the run up to Christmas, with price having fallen from around $20,000 to not far from half that less than a week later, depending on the exchange.
"While prices have since rebounded back to around $15,000, it will be interesting to see whether we see the kind of wild gains that we’ve become accustomed to in the coming months, or whether the recent decline has shaken people’s confidence in the cryptocurrency."
A financial and markets analyst from Morgan Stanley named James Faucette noted that the practical value of bitcoin might soon fall to $0 -- absolutely nothing. Faucette's reasoning as laid out in a paper he published on the subject stems from a lack of acceptance in the marketplace in exchange for goods and services. As of this year's third quarter, only 3 percent of the top 500 eCommerce merchants accept bitcoin as a form of payment.
"If nobody accepts the technology for payment then the value would be 0," Faucette wrote.
Other financial analysts have noted that the bitcoin market is following a precarious path.
Bitcoin following classic bubble pattern. pic.twitter.com/fhEedS4bjq— Patrick W. Watson (@PatrickW) December 20, 2017
Tapping into the Bitcoin Boom
The fate of bitcoin and other cryptocurrencies might be up in the air, but those uncertainties haven't stopped some of the world's wealthiest people from investing.
This year, the world's wealthiest percentage of the population saw a boost in net worth thanks to their various investments in the cryptocurrency markets. Most notably are Tyler and Cameron Winklevoss, the internet investors who had a dispute with Mark Zuckerberg famously detailed in the film The Social Network. The twins invested $11 million in 2011 when bitcoins were less than $10 per unit. That bitcoin investment is estimated to be at $1.3 billion today.
The Winklevoss brothers said plenty of fellow investors laughed at their investment, but they remained optimistic.
"We've turned that laughter and ridicule into oxygen and wind at our back," they said. They also explained that they've already cut up the key to that bitcoin fortune in order to better protect their assets.
Via: Business Insider