Recently, cryptocurrency markets have been an absolute roller coaster. Just a week and a half ago, Bitcoin was valued at US$5,000, and at the time of writing it stands at US$3,460.01. Since then, there have been rumors from China, exchanges suspending trades, and CEOs attacking Bitcoin and cryptocurrency in general. Let’s take a look at some of these events and suss out the current State of the Coin.
China is not Banning Bitcoin, Despite What People Think
One of the most obvious reasons for the downturn in the market is China. The Chinese government, in concert with the People’s Bank of China, issued a far-reaching condemnation and banning of cryptocurrency ICOs. While the ICO market probably is bloated and some regulations needed to be put forth, an outright ban dealt a devastating blow to cryptocurrency prices, particularly Ethereum – one of the primary assets utilized by ICOs – and Bitcoin. Each saw their value drop by large margins.
With BTCC announcing a suspension of trades, the issue only worsened. All this talk of bans and exchange closures are rumors, yet they have taken their toll on the price. This is not the first time – and I promise it will not be the last – we hear that China is planning to ban Bitcoin. However, BTCC’s latest announcement has definitely fueled the panic we are seeing in many investors and traders currently, which in turn impacts the price. While BTCC’s decision was voluntary, it has concerned many people.
Jamie Dimon Calls Bitcoin a “Fraud”
Pretty much everyone who is interested in cryptocurrencies or remotely interested in finance has by now heard about Jamie Dimon’s verbal thrashing of Bitcoin. The bankster termed it a “fraud” and compared it to some pyramid schemes. He also claimed that investors and money entering the cryptocurrency market really only benefited those who are already invested. While it is true that individuals who bought Bitcoin or other cryptos when the price was lower benefit from higher prices driven by new investment, this is how markets work. It is the same reason why people who purchased or were issued Google stock at its beginning are millionaires now. While I am sure Dimon is an intelligent person and obviously has business acumen, I truly believe he is wrong here. Bitcoin is no fraud.
John McAfee provided an eloquent rebuttal to Dimon’s accusation in a CNBC interview. In it, he explained that he sees Bitcoin as having value based on its use cases, its decentralization, and the fact that people continually mine it. Considering it costs over US$1,000 to mine a block, clearly Bitcoin has to be worth something.
Bitcoin: Been Better, Been Worse
Though these are trying times for cryptocurrencies in general, some optimists on the Bitcoin subreddits believe this to be a perfect time to buy. Some have even jokingly thanked Dimon for providing them with a discounted rate. The asset has definitely seen better days, but we also have to remember how far the price has come since the start of this year. Panic selling and remorse over lost funds is normal, but Bitcoin has definitely been worse off before.