Just five years ago you’d be able to buy Bitcoin at $12 each. That seemed like a good deal for those who believed in the future of cryptocurrency. Few could have predicted that in late 2017 they would be sold for almost $20,000 each.
What many predicted, however, was the crash. And this January, it happened.
With a historic tumble of nearly 50%, Bitcoin has fallen to values under $10,000 in an astonishing plummet. It happened swiftly, taking many investors off-guard and losing many of them thousands.
There is panic in the market and, with many analysts claiming the bubble has burst leaving Bitcoin as nothing more than sunk cost, investors are wondering if they should jump ship. But what’s causing all this?
The slump is largely attributed to regulatory concerns from South Korea, China, and Japan. Any action would quickly quell the cryptocurrency’s volatility and, in turn, profitability. And until the G20 meeting in March when world financial leaders are expected to deliberate on how it’s traded, speculation could push Bitcoin further down the valley of red.
“Having no clear fundamental value and largely unregulated markets, coupled with a storyline conducive to delusions of grandeur, makes this more than anything we can find in the history books the very essence of a bubble,” Jeremy Grantham of GMO LLC wrote.
But this isn’t the first time analysts have tolled the death-knell for Bitcoin.
Since 2011, sell-offs have triggered the halving of Bitcoin’s value nine times in total – most recently happening in January of 2015.