Friday the 22nd of December saw a major correction in the cryptocurrency world since the initial boom in prices. So has the bubble bursted and is it time to cash out?
Bitcoin Then Versus Now
At its highest, Bitcoin reached $19,982.60. The following week it corrected rather drastically falling more than a third from its all-time-high price. With every indication pointing to the fact that this is a bubble, many analysts have dismissed the idea that it has begun to burst. That being said, what exactly caused the market to correct itself so drastically?
- Alternative cryptocurrencies beginning to outperform Bitcoin in speed/cost.
- Coinbase allowing Bitcoin Cash Trades.
- Recent hacks on bitcoin exchanges
- Speculation and fear of the imminent crash.
Though falling below $12k on Friday, Bitcoin has recovered slightly this weekend crawling its way back up to $15k. However, the extreme volatility of the market has since seen the price fall to $14k as this article is being written.
Bitcoin: Should I Stay Or Should I Go
According to Skype COO Michael Jackson:
“We’ve seen price falls like this before, and when you look back on them now, you’ll see they weren’t part of a bubble, just a blip.”
As an advisor to the board of Blockchain, a bitcoin wallet provider, he states that the cryptocurrency has not even reached its full potential. While the price adjustment was certainly significant and in many cases damaging, he notes that most of the earlier investors continue to hold.
“Bitcoin’s upper limit is still much more than it is today. If it reaches even one percent of the value store of other major money supplies, like the U.S. dollar, it could be worth 100 times what it is today.”
To the risk-averse, it is a reasonable strategy to cash in on what you originally invested and hold off on the rest. This would provide you with the safety net of not feeling regret for missing out on a future resurgence. However, if you are willing to wait for a potentially massive pay out, staying put may be the best option.
UPDATE: Bitcoin price had an overnight rally of over 10% surpassing $15k.