Cryptocurrency prices dropped by as much as 40% overnight. With plunges across the board hitting all the major tokens. With staunch crypto critics crying that the bubble is finally popping. But is it really?
Kraken, one of the biggest exchanges in the world, shut down late last week. The site was scheduled to go down for two hours for planned maintenance. However, things didn’t go to plan, and the site remained offline for two days.
South Korea isn’t the first nation to consider banning bitcoin, but it could be the most significant. A large portion of bitcoin’s global demand comes from the country. This isn’t the first time that a major government has threatened to ban it. It likely won’t be the last. Years from now, this may be looked back on as an incredible buying opportunity.
Don’t get me wrong, Buffett is a very smart man. And a very smart investor. But he freely admits that he doesn’t invest where he doesn’t understand. And he freely admits he doesn’t understand bitcoin or cryptocurrencies.
You might know that there are various cryptocurrency exchanges all over the world. And depending on investors, prices can differ extremely. Investors in Singapore may value bitcoin higher, giving it a higher price than in the US. One place this has happened in is South Korea.
Computers don’t worry about rationale. They just do what they’re programmed to do, which eventually exacerbates the prevailing trends. But don’t forget, humans program the computers. Human nature is behind all market cycles. It’s just that this cycle is being helped along by the desire to make gains based on unemotional computer generated decisions.
In a recent interview with Fox Business, Dimon said, ‘The blockchain is real.’ He even says he regrets his previous comments. And that he now has ‘concerns’ about how governments will feel about bitcoin ‘when it gets really big’.
CoinMarketCap (CMC) is easily the most well-known aggregate of crypto prices. It’s the closest thing the market has to an index and is frequently cited for up-to-date prices. However overnight, CMC managed to crash the market.
If you bought digital coins in 2017, you would have had a great year. Making more than 12-times your money was as easy as buying a single bitcoin. 2018 might be more of the same.
Part of Bitcoin's value is based on what it can currently do — namely store and transfer your wealth in a decentralised non-government controlled system — and part on what it will be able to do in the future. It’s the second part I want to talk about today. That’s the part the critics overlook. Because 2018 is set to be a very exciting time for bitcoin development.