Looking at Bitcoin's stock chart the past few days may remind you of your serotonin levels after watching the series finale of Shameless.
Or in the words of Jay Sean: "Baby are you down, down, down, down, down?"
Bitcoin: "Yep."
The price of Bitcoin dropped to a low of $51,300 on April 17 after reaching an all-time high of $64,899 just three days earlier, according to Coinbase. The price has rebounded slightly, hovering slightly above $55,000 as of April 20. But that's still a net loss of nearly $10,000.
Like Fred Willard's character in A Mighty Wind, you're probably wondering "Wha' happened?"
Bitcoin's overnight price plunge
Coinbase, the United States' largest cryptocurrency exchange, went public on April 14 with shares opening at $381 on the Nasdaq. This threw the market for a loop and caused Bitcoin to see its biggest drop in two months.
In addition to the Coinbase disruption, speculation over the weekend that the U.S. Treasury could try to combat money laundering involved with digital assets also affected the market, according to Bloomberg. But the Treasury hasn't confirmed these reports.
Federal Reserve Chairman Jerome Powell compared Bitcoin with gold, suggesting that more often than not it's a means for speculation more so than an actual form of currency.
Antoni Trenchov, one of the co-founders of crypto lender Nexo, told Bloomberg that other factors in Bitcoin's price drop include increased leverage and Bitcoin miners in the Xinjiang province of China getting hit with a mass power outage.
The turmoil in the market last weekend led to a nearly 20% drop in Bitcoin's price, and as a result, about 864,000 crypto futures were liquidated, marking a new single-day record, according to The Block. Also known as an offset, liquidation typically means selling off your futures position for cash. It's kind of like trading in your car before it completely loses its value, except that unlike with your 2013 Honda Civic, your crypto can regain its value.
Determining whether futures liquidation is a good idea is comparable to deciding if debt consolidation is a good idea—it depends on the situation and how much you could stand to lose.
What about other cryptocurrencies?
Bitcoin wasn't the only cryptocurrency to take a hit, but when you're the Goliath of the industry, it's much more newsworthy.
According to CoinGecko, half of the top 10 crytocurrencies—including Binance Coin and XRP—are still down over a seven-day span.
The lone wolf to buck the trend was Dogecoin—the crypto that, like your love of Riverdale, started out as a joke. Over the same seven-day span, Dogecoin is up nearly 380% despite an almost 12% drop in the most recent 24-hour period.
That's not to say you should necessarily run out and invest in Dogecoin—the price per share is up to a whopping *checks notes* $0.36-ish as of April 20, but if a certain high holiday has you in a goofy mood, why not?
Sources
- Coinbase
- The Block
- Bloomberg
- CoinGecko
Press Release Service by Newswire.com
Original Source: Everything You Need to Know About Bitcoin's Flash Crash
