On Tuesday, the price of bitcoin dropped 17% in just a few minutes. Whether or not you believe in the merits of bitcoin, Blockchain, or cryptocurrency at all, you have to ask yourself if you need that kind of volatility in your portfolio. Caitlin Ostroff explains what happened in The Wall Street Journal, writing:
Bitcoin’s selloff eased Wednesday, offering some respite to holders of the volatile cryptocurrency after a flash crash a day earlier erased billions of dollars in its value.
The largest cryptocurrency by market value fell 1.3% to settle at $46,154.44 apiece, according to 5 p.m. ET data from CoinDesk. It briefly dropped 17% over the course of a few minutes Tuesday and ended the day down about 10%.
Other digital assets also pulled back slightly Wednesday. Cardano’s ada token and the joke cryptocurrency dogecoin fell about 0.3% and 0.4%, respectively, according to Kraken. Ether, the second-largest, settled up 1.7% after trading lower earlier in the day.
There hasn’t been a single catalyst to precipitate the selloff. A 70% run-up in bitcoin’s value since late July—combined with the euphoria tied to El Salvador’s adopting bitcoin as a national currency—could have prompted traders to book profits, analysts said.
Investors have also been stepping up bets on other cryptocurrencies in recent months, giving a boost to the Ethereum and Cardano blockchains and driving up prices on nonfungible tokens.
Bitcoin and rival digital assets are also notoriously jumpy, with prices frequently swinging wildly on rumors, tweets by influencers or a shift in sentiment among groups of traders banding together on social media to make speculative bets.
During the latest bout of volatility, bitcoin has lost more than $100 billion in market value since Sunday. Other cryptocurrencies have also taken a hit. Ether has lost roughly $56 billion, and Cardano’s ada has shed more than $16 billion.
Action Line: You have to feel safe with what you’re investing in. If you need help developing a plan, I would love to talk with you.
E.J. Smith - Your Survival Guy
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