Wathiq Khuzaie / Stringer / Getty
While peaking it
$5,000 over the weekend, Bitcoin joined almost every other
digital coin that experienced double-digit drops in value over
the past 48 hours or so, before finally recovering
again today (Tuesday).
Toward the end of the weekend and yesterday’s holiday, the
cryptocurrency market lost 20 percent in overall value, from
a Saturday market cap of $180 billion down to $142 billion.
Bitcoin was down some 16.5 percent, while Ethereum lost 23.5
If anything, the two-day crash reiterates how volatile the
cryptocurrency market is. As
the 20 percent drop is equivalent to years of gains in
the U.S. stock market, which a budding crypto investor that
decided to put his stakes in could’ve just lost in 48 hours. If
you were that person, well, tough luck.
Factors beyond control
Bitcoin, nevertheless, came out with an overall gain (at the time
of writing), retaining its doubled price compared to four short
months ago. It’s still up there. Besides, a somewhat similar
trend was observed in the days leading up to that dreaded hard
So, what brought about this drop in the first place? There are a
number of factors, foremost among them was China’s
decision to ban initial coin offerings (ICOs) in the country.
It’s natural for markets to take a hit whenever government
sanctions are imposed; it’s not just for cryptocurrencies. With
China’s decision to return all ICO funds to their investors, some
uncertainty loomed over the fate of more-popular cryptos like
Bitcoin and Ethereum.
Or, perhaps the market simply overheated. As mentioned, the value
of Bitcoin rose to $5,000 before the crash, which could just be a
natural cool-down reaction — like when a thread is pulled taut
and released. Bitcoin’s history of price breakthroughs have
always been followed by price drops. Besides, judging by today’s
values which are already up from yesterday by 2.98 percent
for Bitcoin and 6.87 percent for Ethereum (as of writing), it
looks like the cryptos are already recovering.
Until the next drop, that is.
Get the latest Bitcoin price here.