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Bitcoin – The Meltdown Continues

By:
Bob Mason

Down, but not out as the Bears take another bite out of Bitcoin and the cryptomarket.

bitcoin crash

Bitcoin fell by 2.16% on Friday, following on from a 5.13% slide on Thursday, to end the day at $3,281.7.

It’s been a tough week, month and year for the Bitcoin bulls, with Bitcoin down 6.4% for the current week, 18.7% for the current month and a whopping 76.2% for the current year. If you take the peak, the bulls are down 83.5%.

In the words of Isaac Newton, ‘what goes up must come down’ and nothing has proven Isaac Newton’s theory more than the cryptomarket.

It wasn’t long ago when even the likes of George Soros, well a long time ago in crypto months, publicly announced an interest in investing in the cryptomarket. The April comments may have been considered, by some at least, as late April foods day humour.

After all, it was just a few months earlier that Soros, along with other leaders of the financial world, lambasted Bitcoin and the market in general.

Let’s not forget JPMorgan Chase CEO Jamie Dimon, who made plenty of headlines following some particularly critical comments, while admitting that his daughter had invested.

The bearish, well negative, sentiment has been justified and Bitcoin ended Friday at levels not seen since last summer, which was another poignant moment in the world of crypto, the arrival of Bitcoin Cash.

Touted as the one to topple Bitcoin, last month’s hard fork certainly seemed to have been the last nail in the coffin for the Bitcoin Cash family and, self-proclaimed Satoshi’s Bitcoin Cash SV crypto did few favours to a market in dire need of support, which begged the question of whether the actual creator of Bitcoin would induce such a cataclysmic event that would push back the adoption of cryptocurrencies as an alternative to fiat currency by years.

The total cryptomarket cap struck a year low $101.04bn in the early hours of this morning, holding on to the coveted $100bn with both hands and, even though Bitcoin is finding some much needed support through the early hours of this morning, it’s hard to imagine many jumping into the market on its current downward path.

‘What a difference a day makes, in the soulful words of Dinah Washington….

This time last year, those who weren’t in Bitcoin will have been talking about the “what ifs”…

If only I had just invested a few hundred a few years back…

Unfortunately for some and, quite possibly many, the Bitcoin story has become a cautionary tale. Losing 83.5% of a few hundred bucks is palatable, losing 83.5% of a tidy return or even of a single Bitcoin at $20,000 is less so.

The bulls are still talking it up, likely to be holding some of beleaguered cryptos, trying to rally the troops into jumping back in, but once bitten, twice shy may be the general emotion felt by those who saw their virtual millions vanish almost as quickly as it appeared.

While the bears will be seizing the opportunity to deal Bitcoin and the broader market its final blows, not all hope is lost however.

There is certainly a place for the cryptomarket and there is unquestionably a place for blockchain technology and, to a lesser extent, alternatives to fiat money. The likes of Ripple have demonstrated how effective blockchain tech can be in the real world.

A much needed roll out of unified rules and regulations across the G20 and an eventual inflow of stickier institutional money, once the SEC is able to approve at least a single Bitcoin ETF are all likely to be positives for the crypto world. Earlier in the last year, investors balked at the idea of regulation and oversight, the crypto news wires slamming prices almost on a weekly basis, as regulators in China, Japan and South Korea upped the ante on the crypto exchanges.

It could be the reverse next time around and deliver a true bottom for Bitcoin and the cryptomarket. Ripping the band aid off would have been much easier than this year of pain, but to be fair, Bitcoin at 3,000 is certainly more palatable than Bitcoin at $20,000. Especially when considering the level of adoption.

We’re not quite at the stage of ‘The only way is Up’ and we may well see Bitcoin at $2,000 levels before the bears take a leave of absence, but the time will come when the Bitcoin bulls will, once more, feel the cool wind in their hair.

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About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.

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