Bitcoin in freefall: critics disagree on meaning of turbulent value
In the wake of massive highs for bitcoin – just earlier this week hitting a high of nearly $20k – we now see bitcoin in freefall. In the last 24 hours alone, the value has dropped $5k, as reported by the Mirror.
The drop wasn’t entirely unexpected though with Christmas on the horizon and with big hitters wanting to sell high ultimately forcing the price down there’s something of an inevitability to what City AM has called a ‘santa slump’.
Those new to bitcoin or anyone who hasn’t been tracking it long may think that it spells disaster for the original cryptocurrency but the drop is another in a pattern in which we see a rise and then bitcoin in freefall. After hitting key milestones including $10k and $18k there were drops as bitcoin owners were keen to cash in during the highs.
Naturally critics and advocates alike are weighing in on the meaning and importance of the pendulum pricing.
UBS, a Swiss bank, stated in an analyst note that: “We believe this has all the hallmarks of a bubble. High turnover, against limited real-world use, suggests that many buyers are seeking speculative gain… We do not see Bitcoin as a viable investment.”
In contrast, Neil Wilson, senior market analyst at ETX Capital, said: “Large price swings have become so normal that it’s hard to decide [whether the bubble has popped] – we can easily see this market bounce back in very short order. 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. It looks like it’s time to cash in the gains and spend the winnings on a bumper Christmas.”
Some graphs doing the rounds tell two different stories.
From Coindesk, reported by City AM, this line-graph looks doom and gloom.
However, this shows a very short period of time, while a graph tracking over 5 years from Coinbase, reported by the Mirror, paints the picture very differently.
Time will tell but we’re willing to bet on the success of bitcoin.