For the first time since 2017, bitcoin dropped below $8,000 yesterday and with the drop came a lot of speculation about what the future holds for the digital currency. According to CoinDesk, bitcoin plunged to $7,695.10 but recovered to $8,618 by mid-day – the bitcoin price index on CoinDesk tracks cryptocurrency prices from digital currency exchanges itBit, Bitfinex, and Coinbase.
The general takeaway from some economists and digital currency experts is that bitcoin is likely to weather yet another downturn. They believe that bitcoin can only continue to develop if it continues to be extremely volatile.
“Bitcoin is in trouble,” wrote Lukman Otunuga, a research analyst at foreign exchange broker Forextime. “Price action suggests that bears are clearly in control, with further losses on the cards as jitters over regulation erode investor appetite further.”
Bitcoin is, however, not the only digital currency that is experiencing a rough time. To put this into perspective, cryptocurrencies collectively lost over $100 billion in the last 24 hours. The price drops abruptly changed the mood and people’s perspectives as far as cryptocurrencies are concerned – the hype and overall excitement that was characteristic of the crypto – world, especially during this holiday’s season run-up, turned into a wave of uncertainty that swept through the space like wildfire.
Likely reasons for the price plunge include tougher regulatory scrutiny and imposed measures by governments in South Korea and China amidst concerns about tax evasion, money laundering as well as heavy speculation. Facebook’s ban on cryptocurrency and initial coin offering (ICOs) ads earlier this week is also partially responsible for the price drops – the company is however not changing their stand as they say the ban was influenced by the fact that such ads are “frequently associated with misleading or deceptive promotional practices.”
Also, according to CoinDesk, Ether coins on the Ethereum blockchain sank 15% to $880, Ripple coins slid 13% to 85 cents, and Litecoin tumbled 11% to $128.