The continued bear run in the crypto currency market has continued for at least another week with all the major players suffering considerable losses and there is skepticism if the all time highs achieved just a few days ago will ever return – at least in the near future. The one excpetion in this was ripple which on Thursday evening achieved an all time high of $1.26 at one point only to fall quite heavily the following Thursday morning by around 10% although it is still trading at a very respectable $1.15.
Bitcoin suffered considerable losses and at one point the value of the world’s largest crypto currency fell to below the $13,000 mark only to recover slightly to around $14,000 by mid morning. However this means that the currency has dropped by almost 20% when compared to the $16,500 level reached only on Wednesday morning with volatility appearing to be one of the main cornerstones of the market in the past days.
In fact all the other crypto currencies saw a considerable decline with the chief losers apart from Bitcoin being Bitcoin Cash, Ethereum and Litecoin with Ethereum Classic also suffering substantial losses. In the case of Litecoin, this crypto currency has declined by almost 40% from its all time high of $350 following founder Charlie Lee’s statement that he sold all his Litecoin holdings citing a conflict of interest. Ethereum had seemingly recovered in the early days of the week when it flirted with the $900 mark but it declined sharply yesterday and today was trading at below the $700 mark. Dash was another disappointment, trundling down to just over the $1,000 mark when it had been trading at around $1,200 only a day before.
Analysts and investors have commented that the explosion in values of the crypto currencies in the past weeks have given rise to a correction in the market. This has actually occurred no less than three times in a week with the excess volatility harming those inexperienced investors who bought at all time high prices and are now staring at portfolios which are all in the red. Still, the overall value of crypto currencies is still n extremely healthy $567 billion although it was $621 billion only a day before.
In fact the crypto currency Cardano soared to a market cap of over $10 billion in a matter of days with investors reconsidering the actual values of these currencies. Cardano has since since seen a considerable decline in value dropping by almost 30% over the past week.
It is also important to note that just three months ago in early October, the market cap of every single cryptocurrency in the market combined was less than $145 billion. Today, bitcoin alone is twice as large as the entire cryptocurrency market cap in October at over $300 million.
Cryptocurrencies are also at an early phase in development and adoption. Inevitably, for many years ahead, digital currencies like bitcoin will remain as hyper volatile assets and for the high volatility rate of cryptocurrencies to decrease, the market will need to mature, develop, and evolve. Until then, these wild swings of of gains and losses on a single day will likely occur on a regular basis.
Earlier this month, Blocktower’s chief information officer and co-founder Ari Paul, confirmed that it was Blocktower that placed a $1 million bet on the US Commodities and Futures Trading Commission (CFTC)-regulated bitcoin derivatives exchange LedgerX that the price of bitcoin will achieve $50,000 by the end of 2018. This bullish sentiment has also been echoed by billionaire investor Mike Novgoratz who is confident that the figure will easily be achieved.
During his interview, Paul noted that given bitcoin’s hyper volatile nature, investors should expect the price of bitcoin to fall by large margins, in the same way investors expect the price of bitcoin to surge after major corrections.
“If bitcoin settles anywhere below $50,000 next year, it will expire worthless. But if bitcoin goes to $100,000, it pays 30 to 1 [30-fold]. Bitcoin is volatile. This is a hyper volatile asset. Bitcoin is up more than 1,400 percent this year. It also falls 30 percent almost every other month. These calls are a bet that if its volatile to the upside we can easily see over $50,000 next year,” Paul said on Twitter