While the Bitcoin market is certainly volatile, the digital currency's skeptics may be encouraging gratuitous panic in the wake of a rough couple of months.
Yes, Bitcoin may have lost 20 percent of its value since early June, but there are still reasons for optimism for Bitcoin enthusiasts:
- Cryptocurrency volatility is nothing new. Bitcoin, specifically, has a history of dramatic swings.
- The overall cryptocurrency market is growing in the number of adopters, as well as long term market capitalization.
- It is unlikely that a currency with numerous ardent supporters and even more curious investors will simply start cashing in their Bitcoins with the numerous forecasts for positive growth.
In this article, Lily Katz notes that digital coins have lost 20 to 30 percent of their value in recent days, which seems comparable to Black Thursday until you consider that the current market values of cyrptocurrency are dwarfed by the $396 billion (in 2017 numbers) lost in 1929. There are certainly concerns to be addressed about digital currency, but volatility over the long run may not be one of them.
“When when we look for signs of excess in the market, I look at bitcoin and to me that looks pretty scary,” Richard Turnill, global chief investment strategist at BlackRock Inc., said during a midyear outlook presentation in New York on Tuesday. Whether the virtual currencies were caught up in an asset-price bubble was debated as the market capitalization of the sector soared this year, raising skepticism from pundits including tech billionaire Mark Cuban. Backers such as Ripple Chief Executive Officer Brad Garlinghouse, whose money-transfer company is tied to the third-largest cryptocurrency by market value, said he isn’t convinced.