This post relates to the Bitcoin price decline of Friday, December 22, 2017.
According to Coinmarketcap, Bitcoin’s quotation peaked on Thursday December 21 at around $17,380.00, and it fell from there to Friday’s low of $12,009.00. This represents a drop of 30% in a single day.
Here is the seven-day chart illustrating this:
So, what happened? A 30% decline is huge – did some banker criticize it again?
Well, yes. Charlie Munger, the vice chairman at Berkshire Hathaway, and the partner of Warren Buffett (another Bitcoin sceptic), called Bitcoin a fraud and urged investors to “avoid it like the plague.”
There were more similar comments on Friday from less known investors and banking experts. However, can a few comments hit Bitcoin this hard? It would be unlikely.
Then – what is the problem? Is it because the CBOE and CME exchanges have recently launched Bitcoin futures trading and now the traders can go short, which indirectly causes bearish trends? It may be – it can cause some 1–5% price drops – but 30% in a single day? That is too much – those futures are just derivatives.
But hey – is this about Bitcoin only?
Here is a screenshot from Dec 22 from the waybackmachine (a web archive):
It’s the whole market going down sharply – Bitcoin Cash was losing almost 40% and Bitcoin Gold – 30%. All the cryptocoins in the top ten were down 21% at least! The total crypto market cap on Thursday was $640 billion, and on Friday it fell to $500 billion…
So was this just a difficult Friday that caused much panic…what happened?
I think the explanation is that investors and traders were taking their profits before Christmas day on Monday. Everyone was leaving the market before the weekend. Also, people want to take the profit and start the new year with new forces.
I think the drop is temporary, even if it’s very significant and shows how volatile the market is.
We’ll see everything uptrending again soon!