Venezuela looks to cryptocurrencies

What Harry Truman Could Tell You About Bitcoin

After reaching a peak of over US$11,400 on Wednesday, bitcoin plunged to under US$9,100. Roughly a 20% loss in less than 12 hours.

If you bought in at the peak, panicked, and sold at the trough, you took a big loss. Hopefully, you didn’t do that!

Bitcoin after all, is notoriously volatile. And it’s already roaring back.

You must have heard the old saying, ‘If you can’t stand the heat, get out of the kitchen.’

The adage is attributed to US President Harry S Truman. A man who lived and died in times when even science fiction writers couldn’t conceive of cryptocurrencies.

But if Truman were alive today, he’d say the same thing about bitcoin. Bitcoin has already tumbled 25% or more three times in 2017. And the year’s not over yet!

Let’s have a look at bitcoin’s price action on Wednesday.

The green line in the graph below is bitcoin’s price in US dollars. The blue line represents its market cap (left axis).

bitcoin price 29-11-17

Source: Coinmarketcap

How’s that for volatility?

The more than 20% decline was likely caused by some larger holders taking profits as bitcoin surged above US$11,000. There’ve also been suggestions that some delays and temporary outages at the major exchanges, like Coinbase, may have spurred more selling.

The dip below US$9,100 was met with thinly veiled glee from the crypto naysayers. Was this the beginning of the much-awaited crash? Had bitcoin’s bubble been pierced? How low would it go?

The answers to those questions in order: No. No. And not any lower…at least for now.

At time of writing, bitcoin is trading for US$10,305.95.

That’s how fast things move in this revolutionary market.

Bernd Struben

Bernd Struben

Bernd Struben is the lead editor at The Australian Tribune. Bernd makes use of his extensive network to bring you the top stories you need to know about each day. Stories the mainstream may miss. Or bury somewhere you’re unlikely to ever read them. Bernd studied aerospace engineering and journalism at the University of Michigan, before graduating with a degree in economics. Over the past two decades he’s worked in media, management, and finance in the US, the Caribbean, Europe, and Australia. His other role, as the editor of the Port Phillip Insider, puts him in a unique position to read Australia’s most exclusive financial advice. Some of which he shares with readers of The Australian Tribune for free.
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