The Bitcoin price continued its descent overnight, it plummeted all the down to US$9,402 according to CoinMarketCap. This price represented a huge drop of over 50% from its all-time high of almost US$20,000 a few weeks ago.
However, the Bitcoin price has recovered strongly since, with traders obviously seeing value. The price has risen by almost 21% to US$11,375 at the time of writing.
I have never seen something so volatile.
Cryptocurrency prices are rising and crashing heavily almost every day. The Ripple (XRP) price has grown by 26% over the last 24 hours and there’s every chance it could keep going as traders fear missing out again.
Ethereum and Bitcoin Cash have also recovered some of the last value, they are up 8.36% and 5.96% respectively over the past 24 hours.
The recent crash came about because of three reasons.
First, CoinMarketCap decided to exclude the Korean prices from its price calculation, showing the price lower than it was before.
Next, news came that the Chinese government was going to be even stricter on cryptocurrencies after already banning cryptocurrency exchanges last year.
Finally, South Korean officials announced that they would be banning cryptocurrency exchanges.
I’m not sure that the cryptocurrencies will get back to the all-times values any time soon, if ever, the speculative craze seems to have lost a lot of its fervour for now.
There are also reports that BitConnect is shutting down its lending and exchange platform with some holders losing life savings betting on its future.
I think this whole debacle shows that people should only invest in speculative things with cash (not loans) they’re willing and able to lose. That’s why I love shares so much, they have good long-term potential with real businesses making profit.
Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.