Has Bitcoin's Day of Reckoning Finally Come?

December 22nd, 2017 - 3:45 PM EST by Don Caldwell

15 comments | Contact Newsroom

Pink Wojaks Riding a Cryptocurrency Bitcoin Roller Coaster

Bitcoin, the hardly contested financial juggernaut of the year, may not be as unstoppable as some had previously thought.

While the cryptocurrency giant certainly wrote a new chapter in e-finance history with a baffling 1,800% growth in value since January, speculations of devaluation and bubble burst have been gaining strength for some time, especially since its most recent peak on Sunday at $19,500 per coin. But when the world’s most successful cryptocurrency dipped below $12,000 earlier this morning, the nearly 40% decline sparked a wave of panic among the crypto-investors online.

Adding insult to injury, Coinbase, another major player in the cryptocurrency market, froze buying and selling on the exchange platform, claiming that it could not operate properly due to increased traffic. The news of the freeze comes amidst growing accusations of insider trading against the company after it made a surprise announcement earlier this week to carry Bitcoin's competitor currency, Bitcoin Cash.

The latest hiccups in the cryptocurrency market comes at a time when Bitcoin’s transaction fees have been skyrocketing even as its price continues to drop, making each trade of the cryptocurrency seem more expensive than it is worth.

A Graph of Bitcoin Transactions Fees From October 2017 to December 2017

Despite the widespread speculations of a Bitcoin bubble, others argue that such fluctuations are only temporary “corrections” and the price of Bitcoin will continue to rise. One of the most vocal figures in the crypto-optimistic camp is the infamous computer security entrepreneur John McAfee, whose bold claim that “bubbles are mathematically impossible in this new paradigm” became widely mocked earlier this month.

Expanding Brain Image Macro Meme Discussing the Bitcoin Bubble

In response to today's market events, McAfee tweeted a plea for everyone to "stop panicking" and blamed Christmas for the cash outs, promising an enormous boom after the holiday.

Yesterday evening, Twitter user @ProudMoolie posted a panicked tweet claiming to have mortgaged his house for $75,000 to invest in Bitcoin, updating an hour later that he had sold his coins to afford food for his four children.

Twitter User @ProudMoolie Claims to Have Taken 75,000 Mortage to Buy Bitcoin Then Sold at a Loss

On Reddit's /r/Bitcoin forum, users are lamenting having purchased the currency at its all-time high price, with calls from true believers to "hodl," an intentional misspelling of "hold" often used as an inside joke for resisting the urge to sell one's holdings. Meanwhile, others are referring to the price drop as a “Christmas Special” for buyers looking for a bargain.

Bitcoin Logo with 25 Percent Discount Sticker Christmas Special

Whether or not cryptocurrencies manage to rebound from this dip in value is anyone's guess, but, for now, it might be a good idea to invest in some Pink Wojaks.


Top Comments

Timey16
Timey16

Man the shit some bitcoiners say… "years of experience tell us that like this fluctuation are normal"

I bet the people at Wall street said the exact same in 2008 and look at what happened! And those guys had DECADES of experience in stock trading. DECADES I tell you, if they say there is no bubble, then there is none!

Bitcoin suffers from the reverse problem of Hyperinflation. During a hyperinflation people want to get rid of their money ASAP since it can be worthless in just a few hours, while Bitcoin is the opposite: nobody is willing to spend it (which a currency is supposed to) and everybody hoards it in hoping it will increase in value even more.

Bitcoin at that time has lost it's purpose, it's a purely speculative commodity… but unlike commodities like housing, you can't do anything with bitcoin by itself. Which if anything makes it even more vulnerable to a bubble. This feels like the South Seas Bubble or Dot Com Bubble all over again.

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