Bitcoin, Cryptos and Globally Equity Markets have recovered after a tumble. This time Bitcoin price went below $7000, making it the highest drop for the currency since November. The dizzying heights the currency rose to has seen a constant drop after driving banks and governments into a brief frenzy.
The currency, which has gained a rightful reputation as the biggest digital currency globally as dropped as much as 22% at $6,579 in New York as published by Bloomberg pricing. This has taken out up to 65% from its record breaking values in December.
Crypto Investors Panic: Sinking of Bitcoin
It wasn’t the only currency that saw a drop however, as other rivals dropped as much as 21% including Litecoin and Ethereum. While there is no fundamental root cause to the change, the senior analyst from Digital Asset Research claimed, “it had to slow down at some point”.
There have been several weeks of negative publicity surrounding the digital tokens and big banks including JP Morgan and Bank of America have halted the purchase of these cryptocurrencies.
The biggest loss Bitcoin has faced coincides with investors eliminating high risk assets across the board as stocks have retreated globally. In terms of competing with gold as a store of value, Bitcoin has continued to struggle and therefore reinforces some of the arguments made by its supporters. Other currencies however including the Yen, Franc and even bonds saw notable gains over the period.
The South China Morning Post reported that the Chinese government has also made plans to block any websites that are relating to trade in cryptocurrency in order to effectively eliminate the rapid speculation within the market. Also, Yonhap News reports that North Korea has made attempts to attack South Korea’s programs on cryptocurrency and has even stolen billions. However, some stalwarts of Bitcoin seem unfazed by these developments.
Global Stock Markets Crash
Cryptocurrencies weren’t the only financial instruments to tumble, as global equities followed this trend. Oil prices, including the US Stock markets declined by 252.12 points reflecting the DOW Jones Industrial Average lowest start to the year. The price of crude also declined by 5.6% with Europeans markets also feeling the effect of the slow start to the year.
Investors however continue to pour into the Bitcoin space in order to get a piece of the action. A former manager of Fortress Hedge Fund even predicts that Bitcoin could soar to $40,000 at the end of 2018, further increasing interest in the cryptocurrency.
Even in the midst of the crisis, Bitcoin still seems to enjoy a pretty healthy demand, even acting as a safe haven for some investors, though the volatility of the crypotcurrency still seems to be a deterrent for most.