In September, Bitcoin hit a low of US$3,226.41. Around the same time there was plenty of crypto hate going around. Largely, it was coming from China and JPMorgan & Chase Co. [NYSE:JPM] chief, Jamie Dimon.
But the coin has rebounded from its low and now trades around US$3,937.91, edging closer to that US$4,000 mark:
Source: Coin Desk
As reported by CNBC:
‘Bitcoin is still under the $4,000 level, which it broke through after JPMorgan CEO Jamie Dimon said on Sept. 12 that the cryptocurrency is a “fraud” that will eventually blow up.
‘In addition, recent reports said regulators in China have ordered bitcoin exchanges to close hurt the digital currency’s price.
‘“In my opinion, the markets overreacted to the China news. In the short term, it was bad news, but long term the fundamentals are unchanged,” William Mougayar, author of “The Business Blockchain,” wrote in an email.’
I agree 100% with Mougayar. While bitcoin is still a relatively new asset class to put some money into, there’s still one thing that hasn’t changed. Human psychology. Irrational investors push asset prices to unnecessary highs and unnecessary lows.
They do it to stocks, real estate, commodities, bonds and now, even crypto currencies. That’s why I believe this won’t be the last time bitcoin dropped significantly, while it’s very hard to value bitcoin because of the uncertainty around it.
Will it become a new global currency? Or will we just use the revolutionary blockchain and discard the tokens?
However, if you could come up with an estimated value for the coin, then you might be able to take advantage of these temporary dips.
If you’d like to know more about the secret world of bitcoin, click here.
Junior Analyst, Money Morning