They say that nothing can last forever. Whoever “they” are, they’re not likely a part of the crowd that was hoping that bitcoin’s $1,000 break would last longer than it did.
Bitcoin was riding high until yesterday — hitting new heights not seen in years. At 8:00 a.m. Coordinated Universal Time (UTC) on Jan. 5, bitcoin was worth $1,153.02. But by just after 1 p.m. UTC, the price of bitcoin had dropped down 23 percent to $885.41. At the time of this publication, bitcoin’s price has recovered a bit, hovering around $955 as if unsure what to do next.
Turns out the uncharacteristic stability seen in the past few weeks was, well, uncharacteristic. Industry experts have been quoted as saying said the recent, and rapid, rally in bitcoin created a “little bubble,” which has burst. Though the sudden drop in value is disappointing for bitcoin lovers, long-term prospects are still largely positive.
Peter Smith, chief executive of bitcoin wallet Blockchain, was quoted via email as saying, “Once we broke through the nominal all-time high, liquidity dried up — no shorts, no sellers, which means a volatile little bubble formed quickly. We are seeing the effects of that now. It’s still fairly thin trading volume, though. I expect the market will find a floor and stabilize somewhere in the $850 to $1,000 range, but we’ll see.”
Just a reminder for folks a bit torn up by this news — bitcoin’s price as of now is in the same region it was just a week or so ago when everyone was getting hyped for it to break $1,000. Worldwide trends toward bitcoin adoption and legitimization may have helped the recent price increase. But a bubble is a bubble, and bitcoin is volatile. While the drop was sudden and dramatic, bitcoin is still far more valuable than it has been in years (excluding the past week-and-a-half, of course).