Bitcoin Plunges Below $10,000 As Cryptocurrency Rollercoaster Ride Gets Bumpy
Back in mid-December, Bitcoin peaked with a value of over $19,000 per coin. Then just a few days later, it dropped to below $14,000. After that it went back up a little bit, then fell to below $13,000 by the end of the month. In the first week of January, Bitcoin's value was back up to over $17,000. It has been steadily declining ever since, and now less a month later, Bitcoin is trading for around $9,300. If you are new to cryptocurrency investing, you might be wondering what the flip is going on. Welcome to a volatile market.
That's the short explanation, anyway. Investing in cryptocurrency will test your health, because you need to be able and stomach the wild ups and downs, especially when it comes to Bitcoin. Had you put a little bit of money back when Bitcoin was new and trading at a fraction of a cent, you could have retired a millionaire and spent the rest of your days traveling the world. But now? Investors ride the rollercoaster.
Today's heart-dropping downswing is a market reaction to news of a ban on cryptocurrency in India. That is how many outlets are reporting on comments made by India's finance minister Arun Jaitley.
"The Government does not consider cryptocurrencies legal tender or coin and will take all measures to eliminate use of these crypto-assets in financing illegitimate activities or as part of the payment system," Jaitley said Thursday as part of his 2018 budget speech. "The Government will explore use of blockchain technology proactively for ushering in digital economy."
India had already been investigating illegal exchanges last month, and many took Jaitley's recent comments on cryptocurrency to mean a ban is coming. That's not actually what he said, but it doesn't matter in the larger picture of cryptocurrency trading. Even if his comments are being misconstrued and no ban is coming, the situation highlights how volatile the market can be.
It also doesn't help that just last week, the largest cryptocurrency hack in history took place at Coincheck, a cryptocurrency exchange in Japan. Hackers made off with $530 million worth of NEM tokens, which is more than the infamous Mt. Gox hack from several years ago. Coincheck is refunding affected customers out of its own pockets, but even so, it's easy to see why valuations fluctuate so wildly.
Consider this—in November of last year, investors were excited about Bitcoin approaching the $10,000 mark. Now they're panicking as Bitcoin has fallen to around the same value. Fun stuff.