After a couple of great highs, bitcoin is finally seeing a low. Last Thursday, many cryptocurrency investors cashed in on their holdings after solid consecutive highs. After which, bitcoin saw a fall of over 10 percent.
If we look at November’s data alone, this digital currency gained by 20 percent. Moreover, earlier this week, bitcoin set a record by reaching $20,000. And so, it’s not a surprise that digital currency traders wanted to cash-in on their profit before things turned sour. Additionally, we cannot say that this was something out of the blue. Even though the stock market is pretty volatile, a regular high and low is the way it normally functions.
Biggest Single-Day Drop For Bitcoin
This drop of over $2,000 is one of the biggest single-day loss in around 3 months for bitcoin. At exactly 8:45 in the morning, this cryptocurrency fell to $16,725. Even so, its value is still around 21 percent higher compared to other months. If we compare it by the year, the value is still higher by 138 percent. On Wednesday, bitcoin saw a massive rise to $19,497. However, disappointing the cryptocurrency investors, it failed to reach the record set in 2017, which stands at $19,666.
Ever since the pandemic, while many industries have shut down or are operating at a minimum level, digital currencies have been soaring in value. The most popular cryptocurrency at the moment is bitcoin, ether, and others are also following. The popularity of bitcoin, some traders hoped, would accelerate the value of other digital currencies.
Experts have determined that bitcoin traders shifted their value to other exchanges so that they can gain maximum profit. In fact, the sensational rise of bitcoin made many traders nervous as an upward trend always reached a tipping point. And, it looks like this cryptocurrency has reached its tipping point. However, don’t make the mistake of thinking that it’s over for bitcoin. Experts believe that this is just a cooling stage for digital currency.
Current Bitcoin Stock Market Scenario
John Kramer, a cryptocurrency expert from GSR, said that the current stock market scene looks completely divorced from the reality of the US economy. While the unemployment record and the Coronavirus cases reached unprecedented highs this week. The S&P also hit its record high. What does this mean? Well, Kramer said that while the stock market return is low and the risks are high, the market is still very active.
The rise in bitcoin and other cryptocurrency values is also because it’s not completely related to class assets, interest rates, and the general economy. The digital currencies are untraditional. And so, it’s not surprising that it’s experiencing highs in such untraditional times.