Long familiar with extreme ups and downs, Bitcoin has a history of moving higher rapidly, and also crashing suddenly. This past 24 hours appear to be encompassing both of these directions as the markets engage in an active game of tug of war, with billions of dollars on the line.
Those who have only recently gotten on the cryptocurrency bandwagon, buying into the recent parabolic rise of Bitcoin, have to be vomiting in disgust as they watch their hard-earned money being beaten like a dirty rug, but this is it – this is what it looks like to be involved in the cryptocurrency space, and something that veterans of the markets have seen time and time again. It is not all peaches and cream.
It began yesterday, when Bitcoin surged higher, out of nowhere, rising to a high of $11,323 USD from a $9721 USD start of the day. This was a monstrous gain in less than 24 hours. However, it was not meant to last as it promptly plummeted downward to $9435 USD, causing many of the major Bitcoin exchanges to crash themselves and go offline, including Coinbase, which is the most well funded exchange within the sector.
Following this crazy few hours, Bitcoin began to climb higher once again, easily breaking the $10,000 USD mark in overnight hours trading, but this too was not meant to last.
Seeing this extreme volatility has caused many holders of the cryptocurrency to take profits, pulling out their money and causing another rapid crash lower – which as of this writing, has Bitcoin resting around $9,362 USD.
Compounding these problems is the fact that prominent names within the precious metals space have recently come out and suggested that perhaps it is time to take some gains, as the price of Bitcoin has gone parabolic throughout 2017, shocking even some of its most stout supporters.
As I have previously mentioned, 2017 has been a phenomenal year for Bitcoin. For those who got in even at the start of the year, you should be congratulated, as you made the right call and are now looking at huge gains. But as I have also seen numerous times in the past, Bitcoin can evaporate the majority of your gains in the blink of an eye. This isn’t the first time, nor will it be the last time that Bitcoin suffers uncontrolled volatility.
It has been, and continues to be, a wild, uncontrolled and incredibly speculative asset – one that has the potential to either change the financial world for all time, or possibly be the greatest scam we have seen since the Tulip mania.
I lean towards the former, but remember this always: there are powerful forces actively working against Bitcoin and its success — forces that will not take this change and threat to their fiat power lying down.
This article is brought to you courtesy of Sprott Money.