Cryptocurrency Market Implosion Continues As Bitcoin Falls Below $6,000
It was only a few months ago when there was talk of Bitcoin being on a trajectory to perhaps hit $50,000 or even $100,000, which could make late adopters wealthy and early adopters obscenely rich (more so than they have already become). Fast forward to today, however, and the future is as murky as ever. Not that it was ever crystal clear. However, the virtual currency dipped below $6,000 today, it's lowest value since November.
The recent drop further underscores the volatility of cryptocurrency, and the overall uncertainty over its future. Proponents of cryptocurrency will say they have heard this a million times before, and that analysts are once again overreacting to a drop in value. And they might be right—it's entirely possible that Bitcoin sees yet another rebound and skyrockets in value. But it's also entirely possible that it doesn't.
At the beginning of the year, Bitcoin ballooned to over $19,000 and looked like it was going to keep climbing. After hitting that mark, however, it started to drop. Then last month, Bitcoin looked like it was recovering somewhat and was nudging up against $10,000, but then started to slide again and kept sliding. At the time of this writing, Bitcoin is valued at $5,888.40.
For the moment, investors seem to be reacting to recent hacks at cryptocurrency exchanges in Asian markets. Combined with the cryptocurrency's volatile history and previous hacks, there seems to be a wave of skittishness, and some skepticism that Bitcoin will ever see the astronomical valuations that were being talked about earlier this year. In total, Bitcoin has seen a 60 percent dip in 2018, after ascending more than 1,300 percent last year.
Will Hobbs, head of investment strategy at Braclays Smart Investor, told Reuters that "none of the cryptocurrencies currently fulfill any of the criteria that we would look for in an investible asset." Hobbs is advising "extreme caution," warning that the downward spiral is not over.
That said, Bitcoin is still trading for far more than every other cryptocurrency out there, with a market cap of over $101 trillion. In comparison, Ethereum has the second largest market cap at $41.4 billion, though its value is also down today. As for where things are headed, well that's the million dollar question, isn't it?