There is no denying the popularity of bitcoin which appeared to peak in December last year. The surge in interest for crypto currencies has led many to compare the rise of the Bitcoin to that of other bubbles. The situation of the crypto currency bitcoin, was likened to that of previous bubbles such as the technology bubble of 2000 and the tulip mania of the 17th century. Like these previous bubbles, is the Bitcoin bubble about to burst?
The value of bitcoin rallied from $966 at the beginning of 2017, to almost $20,000 by the end of 2017. However, 2018 has seen as less convincing price action, with the value of Bitcoin falling heavily in some sessions in January, bringing the price at one point down to a low of $9,402, over 50% lower than its December market high. Bitcoin has now settled around $11,000 to $12,000 where it has been trading for the past week in consolidation.
It is still too early to call whether the bitcoin frenzy is over. The media attention has certainly died down and the number of “bitcoin” searches on google has also declined from its high in December, around the time the price peaked. But the sheer volatility of Bitcoin makes it incredibly difficult if not impossible to decipher between a price correction and a price crash.
Looking through Bitcoins short yet colourful history, this January’s price correction pales into insignificance compared to some of the price corrections of the past. For example, in 2010 Bitcoin crashed twice once shedding 94% and the other 72%. The again in 2011 a 94% crash the cryptocurrency shed 76% to name but a few examples. There is no denying that Bitcoin is a wild, volatile ride, but isn’t that half the attraction? Each time when it appeared that Bitcoin had crashed and burned it revived itself.
Does that mean that mean Bitcoin will revive itself again this time round? There really is no definite way of telling. Perhaps the only real way of knowing if the price will revive is by seeing and understanding which needs Bitcoin and other crypto currencies can actually genuinely meet, if any?
If you think Bitcoin is destined to fail, or at least continue its heavy sell off for some time to come, then a short position on Bitcoin would be appropriate. You can trade bitcoin through a forex brokerage such as Vantage FX. This is a regulated Australian brokerage which has some many awards for its superior offering. Furthermore, Vantage FX offers its clients the option to trade Bitcoin through the world renowned MT4 account, offering clients all the tools necessary to trade Bitcoin successfully.