Last year the word bitcoin became part of the everyday lexicon in America, and many parts of the world. The phenomenon “investment,” was being traded by grandmas and kids. Coverage of bitcoin’s rises and falls has been on TV every day for months now. If there was ever a classic bubble, this was it.
Olga Kharif reports at Bloomberg:
Bitcoin tumbled for a fifth day, dropping below $7,000 for the first time since November and leading other digital tokens lower, as a backlash by banks and government regulators against the speculative frenzy that drove cryptocurrencies to dizzying heights last year picks up steam.
The biggest digital currency sank as much as 22 percent to $6,579, before trading at $7,054 as of 4:08 p.m. in New York, according to composite Bloomberg pricing. It has erased about 65 percent of its value from a record high $19,511 in December. Rival coins also retreated on Monday, with Ripple losing as much as 21 percent and Ethereum and Litecoin also weaker.
“Although no fundamental change triggered this crash, the parabolic growth this market has experienced had to slow down at some point,” Lucas Nuzzi, a senior analyst at Digital Asset Research, wrote in an email. “All that it took this time was a large lot of sell orders.”
The technology behind bitcoin is interesting, and there are certainly other great uses for blockchain, but was there ever any real value in the crypto currency itself? With Central Banks clamping down, and prices dropping fast, the world might not have a chance to find out.
One thing is certain though, bitcoin was never the next gold. Despite investors who sing its virtues, bitcoin doesn’t yet have the history or respect to come close to gold’s reliability. Gold is a hard, tangible asset that works, even if the lights go out. That’s its appeal. Bitcoin on the other hand relies completely on the grid to operate. If you’re looking for a store of value in disaster, there’s nothing better than gold.