After months of rapidly increasing in value, Bitcoins have suddenly dropped a major amount with absolutely no warning.
The cryptocurrency lost a major chunk of its value in just a few hours Wednesday, leaving investors bewildered.
Bitcoin value dropped more than $2,000, one of the sharpest declines for the cryptocurrency, and this just a day after it hit a record-breaking high of $11,000. Luckily, it’s since somewhat stabilised and is holding firm at just below $9,800 at the time of writing.
Despite this massive drop, Bitcoin is still worth almost $2,000 more than it was last week. However, that only serves to validate analysts’ claims; that Bitcoin is far too volatile a currency to rely on, and that its rising value is a dream bubble that will inevitably pop.
“The market cap of Bitcoin now exceeds that of IBM, Disney, or even McDonald’s,” senior market analyst at ETX Capital, Neil Wilson, told The Guardian. “But for traditionalists, it’s hard to fathom. Rather than a commodity or currency, Bitcoin is like owning stock in a company that will only ever issue 21 million shares and never pay a penny in dividends.”
“The only way it has value is if the next guy is willing to pay you more for it – the greater fool.”