Do Not Read This: Diego Cagahastian from Opinyon
Do Not Read This

Bloody Saturday for Bitcoin

Dec 5, 2021, 1:15 AM
Diego S. Cagahastian

Diego S. Cagahastian

Columnist

CHARLES Munger, India and China and all other detractors and deniers of cryptocurrency must be saying, "I told you so."

Super-anxiety was the name of the game for Bitcoin investors and retail traders last Saturday when they experienced massive selling or liquidation in crypto space led by Bitcoin.

Bitcoin prices dropped sharply that day, getting hit by 22 percent losses, or close to One Billion US dollars.

The Markets Insider report said, "Bitcoin was 12% down at 0920 GMT at $47,495.It fell as low as $41,967.5 during the session, taking total losses for the day to 22%.

"The broad selloff in cryptocurrencies also saw ether, the coin linked to the ethereum blockchain network, plunge more than 10%."

This is not the first time that Bitcoin suffered setbacks in price. Last September 20, 2021, Bitcoin lost as much as 10%.It was last down more than 7% at $43,790.25.The broader crypto market was in the red, too, with ether down 8.5% to $3,060.8, as were crypto-adjacent stocks.

Coinbase and Microstrategy lost 3.5% and 4%, respectively, while Square slipped by 2%.In cryptomining stocks, Riot Blockchain fell 6% and Marathon Digital fell 5%.

This reminds us about what economic and investment experts have been saying all along -- that the run-up on the prices of Bitcoin and other cyrptocurrencies is a bubble. Such contention was made more than two years ago.

In 2019, the question for these experts is when --and not if-- the price of Bitcoin will crash.

Another question that baffles most investors and financial advisors is this: will a phenomenal meltdown in Bitcoin affect the US and the world economies?

It is somewhat reassuring that according to Investopedia, the Financial Stability Oversight Commission recently released a report listing the challenges to financial stability, and digital currencies merited a very brief mention.

"According to the Financial Stability Oversight Commission, virtual currencies have a 'very limited' impact on financial stability. This is likely because the current Bitcoin ecosystem is fairly small," said Investopedia.

More on why the Bitcoin market downside happened in my next column.


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