What is Up with Bitcoin?

Many bitcoin users and speculators alike have been puzzled by the recent decline of the bitcoin market. After last year’s meteoric rise to over $20,000 per coin, many speculators and analysts were predicting $40K, $50K, or even $80K price targets by the end of 2018. It is all too clear for bitcoin owners that it is not going to get anywhere close to those numbers. Bitcoin is currently trading for $6400-$6500 per coin.

So what has happened exactly?

There are many theories on the topic. Some people say that the buzz created by the media drove the price up and that interest has since waned. The real reason appears to be much more dubious. A report on bitcoin released three days ago strongly suggests that the coin was propped up using various tricks. Essentially it says that operators at the exchange known as Bitfinex artificially inflated the numbers using other coin value to prop it up.

Another factor is that there are a handful of Chinese investors who own a large share of bitcoin (about 40% to be exact). Whenever one of these “bitcoin whales” sells a huge chunk of his bitcoin, the market reacts and a selloff occurs. This is the main reason we have seen the huge falloff the last few weeks.

What should I do with my bitcoin?

If you own bitcoin, I say keep it, especially if you have already profited and the coin is worth more than what you put into it. If you are very stressed, take your initial investment out of it, so that you are only playing with house money. Many people are not capable of handling the roller-coaster that is bitcoin. The internet is loaded with stories of people who killed themselves after losing their bitcoin fortunes or selling too early. It’s a sad reality of human nature that anytime a bubble bursts, a stock market crashes, or the economy tanks, there will people who cannot handle the losses and do self-harm.

June Losses Have Been Pretty Dramatic

There is no way to tell if bitcoin will be the future of financial exchange that many experts claim it will be. I can tell you that the future of money is blockchain, the technology in which bitcoin utilizes. But, there are thousands of crytpocurrencies at the moment and the truth is the one that really takes over and stabilizes may not have even been launched yet. For the foreseeable future bitcoin does look to have plenty of upside. It is the most accepted and used of all the cryptocurrencies.

Speculators who don’t use the stuff don’t fully grasp how good it really is, in terms of solving financial transaction problems. Its use as a financial transfer tool in undeniable. The fees are very small (pennies per transaction) and the transfer time is usually well under an hour, sometime just seconds. My advice to people who cannot take the losses is that they immediately cash it out and take the standard currency value, ie, dollars, euros, pounds etc. If you can afford to let some of it ride, leave ten or twenty percent in there, commit to long-term investing and see what happens.