Cryptos Fail To Recover
After experiencing a major drop two weeks ago, the cryptocurrency market has failed to recover. Prior to the drop that occurred roughly two weeks ago, the crypto market at-large had been very stagnant. The price of Bitcoin was hovering around $6,000. However, it then suddenly dropped to the $4,000-$4,300 range, where it sits now. Many of the other top cryptocurrencies saw similar price drops.
A HIstory of Volatility
Cryptocurrencies have a history of being one of the most volatile asset classes of all time. It is relatively normal for cryptocurrencies such as Bitcoin to gain or lose 10–20 percent in a single day. This kind of volatility can provide investors with a true rollercoaster-like experience. Cryptocurrencies have both made people very wealthy and have wiped out a lot of wealth as well.
However, despite the fact that volatility can be very annoying for investors, sometimes the greatests assets are very volatile in their first ten years or so. Amazon stock (AMZN) is a perfect example of this. In the first few years after it was released, AMZN stock jumped from $1.73 all the way to $89, resulting in incredible gains for anyone who held the asset. However, in the next few years, the price dropped all the way back down to $7.00, resulting in massive losses for investors.
But, after that major correction, the price of Amazon stock basically never looked back and it kept climbing and climbing. Now, it is worth roughly $1,690.17. A number of other extremely profitable stocks such as Google (GOOG) also had similar periods of volatility in their first decade.
Where will the crypto market go next?
It is anyone’s guess where the crypto market will go next. The SEC has been cracking down on a lot of things lately, and this tends to scare away investors. For example, the SEC has been investigating Tether, and is now looking to investigate celebrities and social media accounts that promoted ICOs without disclosing the amounts they were being paid to promote these ICOs. This kind of news is generally not good for the crypto market.
Also, all of the drama surrounding the Bitcoin Cash hardfork did not exactly help the market either. But, once all of this major bad news subsides, and if some good news can come out, then it could turn the market around. This will be especially true if the SEC will approve a Bitcoin ETF.
