19 Jan The bitcoin resurgence Cryptocurrency bouncing back after 48 hours of ‘carnage’
Bitcoin, the world’s most popular form of digital currency, appears to be rising in value after a chaotic start to 2018 and a particularly rough 48 hours which one analyst called “carnage”.
This week, a slew of cryptocurrencies crashed, leaving new investors out of pocket after an unprecedented few months of growth. CNBC reported that the co-founder of Ripple, one coin hit by the drop, lost $44bn (£31.6bn) on paper during the turbulent period alone.
Across the board, however, the market was looking up on Thursday (18 January). Bitcoin, Ethereum, Litecoin, Ripple and Bitcoin Cash were all rising in price, according to CoinMarketCap, a website which tracks the values of digital currency in real time.
Bitcoin was once again in a healthier state, rising above $10,000. At the time of writing, a single coin was priced at more than $11,600 but it remains unknown if this a real resurgence or a temporary burst.
“The market has been carnage and a lot of investors are starting to take a step back and breathe a sigh of relief as the price has stabilised,” Charles Hayter, founder of the website CryptoCompare, told IBTimes UK.
“Trading volumes were extraordinarily frenetic across the exchanges yesterday [Tuesday],” he continued. “The correction was expected and it has been a big one.”
He did not speculate on where the market would end up but said there were “a few positive catalysts on the horizon”. These will be likely to include a number of incumbent financial products soon entering the space, he said.
Financial commentators and banking chiefs have for months argued that cryptocurrency is a bubble. The CEO of JPMorgan has previously branded it a “fraud”, while others appeared hesitant to embrace bitcoin because of its volatility and links to money laundering.
The most recent price scares were in part caused by speculation that governments in China and South Korea – two huge markets – were set to ban trading on crypto exchanges.
It is impossible to know what will happen to bitcoin, or its many competitors, in the future. In this industry, hype breeds speculation and that can make or break the entire system. This week, the downfall was so extreme that the community posted links to suicide hotlines.
But some experts say that volatility is part of the game when it comes to unregulated currency.
“Everyone relax!” tweeted technology pioneer and cryptocurrency investor John McAfee. He said banks had become “rightfully terrified of what we are doing”.
“No matter where crypto settles, it’s value will increase. We all know this,” he said later. “Don’t let fear make this worse.”