Bitcoin Value Cut in Half after Reaching Lowest Point of 2019

Bitcoin Price Drops, Worst Decline of 2019 Thus Far

Bitcoin Price Drops, Worst Decline of 2019 Thus Far

Bitcoin has fluctuated constantly between highs and lows since it began in 2009. But recently its value sliced in half, signaling an all-year low. As a result of the bitcoin (BTC) low of 2019, some investors are wary of what’s to come. 

The drop is the biggest in six months for the digital currency. On November 24th, bitcoin fell to $6,500, more than half of its $14,000 peak in July. However, the following day it bounced back nearing $7,400, according to calculations by CoinDesk. But despite the comeback, analysts are bracing for a further decline in value.

Tim Enneking, the managing director of Digital Capital Management, shared his perspective:

“We don’t see $6.5k as the bottom, although it’s the first strong candidate for that title,” he said. “While there might be a move up before it happens,” we expect bitcoin to drop below $6000 “before this correction is over.”

Another analyst, Marouane Garcon, who manages Amulet, also commented on the bitcoin (BTC) low of 2019:

“It’s nakedly obvious that we can’t agree on a true price and it’s still extremely volatile to current events and even fake news,” she said. “I wouldn’t be surprised if the price continued to drop.”

Political Consequences for Virtual Currency

Current events have a great influence on bitcoin’s value and contribute to its volatility, as Garcon states. For instance, recent comments praising blockchain by Chinese President Xi Jinping notably improved investor confidence. In particular, he called the encryption technology an “important breakthrough”. 

The fate of cryptocurrency is ultimately tied to politics and policy among the world’s most economically fit countries. According to Mohamed Zidan, chief market strategist for ThinkMarkets in Dubai, “China has been the catalyst for the major moves and swings in the bitcoin.

“The last rally was because Chinese president declared his plans about increasing the investment in blockchain technology and digital Yuan.”

But although the Chinese president’s favorable view of crypto temporarily raised spirits, other policies are not so kind. The recent bitcoin (BTC) low of 2019 followed after the People’s Bank of China announced a crackdown. Specifically, it is targeting a concern over illegal use of digital currencies, Zidan said. 

“It was a signal for crypto investors that Chinese future for blockchain investments and digital currency would not include cryptocurrencies like bitcoin,” he stated. 

Evidently, the numbers revealed that investors did not like the scrutiny on bitcoin, and value plummeted.

Rising Optimism

 

Not everyone is losing faith in a bitcoin comeback, however. For instance, Lennon Sweeting, director of institutional trading at Coinsquare Capital Markets, sees the drop as a move towards stability. 

 

“President Xi’s comments on blockchain technology and its importance for China sparked a pretty significant rally,” he said. “And I think really what we’ve seen here is just a small correction on the back of those headlines.”

 

Sweeting represents just one of many analysts looking at the bigger picture for crypto. Jinping’s acknowledgment of blockchain’s usefulness is a small victory, but a victory nonetheless.

 

Facebook’s entrance into the crypto market, Libra, is also facing mixed feelings from lawmakers around the world. Investors worry that political opposition to Libra could mean future roadblocks for bitcoin. However, analysts like Sweeting see the social media currency as a trial for the future of crypto.

 

“The Libra story is another example of headline-driven volatility, and I think it certainly has an effect on how bitcoin would trade,” he said. 

 

 

Eyes On Crypto

 

However much volatility, the market continues to generate interest among investors and even larger corporations. One such investor is Fidelity Investments, a finance management firm. This speaks to the potential of crypto, despite the bitcoin (BTC) low of 2019. 

 

“We are starting to see more traditional investor managers or asset managers express some interest in the space,” Sweeting continued. “But [bitcoin is] still lacking some participation from mainstream institutions that really does need to take place in order for the market to really find its footing.”

 

Ultimately, the bitcoin (BTC) low of 2019 represents a bump in a long line of ups and downs. After a decade since bitcoin entered the minds and imaginations of investors and financial analysts, the currency is mingling below its all-time peak of $20,000 in 2017. 

 

 

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