2017 was a fabulous year for Bitcoin and other cryptocurrencies, which collectively experienced rapid growth in terms of price, market capitalization, popularity, and virtually every other metric imaginable.
The tail end of 2017 and the entirety of 2018 thus far haven’t proved to be as friendly as the rest of 2017 to Bitcoin and company.
Bitcoin’s price dropped to 2018’s lowest point on Friday, February 2nd, 2018, down to $7,695.10, according to cryptocurrency exchange platform CoinDesk.
The Background Of Bitcoin Price Volatility Over The Past 13 Months
On the last day of 2016, the price of Bitcoin hovered just a hair below $1,000 United States Dollars per 1 bitcoin. Throughout 2017, the price of Bitcoin steadily climbed upwards. In the latter half of the calendar year, price increases suddenly became steeper.
In early December of 2017, the price of Bitcoin rose upwards of $19,000, with some cryptocurrency exchanges marking its price as high as roughly $19,500. It never reached the $20,000 mark, its price dropping somewhat steadily since.
Prior to the price rise, financial advisors and prominent figures in the financial industry didn’t express much faith in Bitcoin. However, as time passed, cryptocurrencies gained acceptance in the world of finance and investing.
What Does The Most Recent Price Drop Mean For Bitcoin?
Bitcoin is a digital asset that doesn’t offer any true value outside of society’s value for it.
In the seventeenth century, the Dutch experienced the “tulip craze.” Over the course of a few months, the price of designer tulips rose to extraordinarily high marks. Much less than one year after the craze began, the price of tulips dwindled down to nothing.
Tulip bulbs don’t offer any real value to those who own them. Flowers are pretty, and smell good, but they don’t hold the same value as promises to pay money back (bonds) or shares in public companies backed by billions of dollars in revenue (stocks).
At the turn of the millennium, financial markets experienced the dot-com speculative bubble, in which the price of shares in technology companies dropped dramatically. Throughout history, several other speculative bubbles have existed, too.
Those Internet companies offer real value, and have since rebounded – tech companies now rule the world, more or less. Nobody knows if this is the only universe in which such a rebound would have happened.
However, it’s always safer to feel favorable about speculative investments if they offer real value. Bitcoin, though I love it and all other cryptocurrencies, isn’t looking so good right now.