Bitcoin is trading at $14,692.25 at 10:51 PM December 22, 2017 according to Bitstamp. Bitcoin once traded as high as $19,187.78 on December 16th.
Unfortunately, today’s price drop in Bitcoin of as much as 30% is nothing short of a rout. Coinbase, among the world’s largest cryptocurrency exchanges, said all buying and selling was temporarily disabled today from delays in processing wire transfers, verifying new customers, and high traffic.
We know from the Star Wars trilogy that the Empire strikes back. Luke Skywalker gets his tail kicked. That’s capitalism. Markets rise and markets fall. But in the end, the Rebels win. Luke Skywalker blows up the Death Star and then parties on the forest moon of Endor in a treehouse with the Ewoks.
This week’s losses represent a major test for the cryptocurrency industry and the blockchain technology that underpins it.
Bears–those forecasting the cryptocurrencies will fall in value–cast doubt on the value of the virtual assets. Financial powerhouse UBS called bitcoin the “biggest speculative bubble in history.” Bulls–those who believe the currency will rise in value–argue the technology is a game changer for the world of investment and finance.
Everyone will be closely watching the outcome of the current selloff.
Long Island Iced Tea Corp shares rose as much as 289% after the unprofitable Hicksville, New York-based company rebranded itself Long Blockchain Corp. Similarly, Longfin CEO Venkat Meenavalli called the metoeric rise in his company’s stock price from $5 to $130 pure speculation. He said, it’s “insane.” Longfin acquired Ziddu.com, a website positioning itself as a blockchain-linked provider of financing for small businesses in emerging markets using Bitcoin and Ethereum.
Bank of Japan Governor Haruhiko Kuroda said Bitcoin isn’t functioning like a normal means of payment and is being used for speculation.
Michael Novogratz, a former Goldman Sachs Group macro trader, said he’s putting plans to start a cryptocurrency hedge fund on the back burner. He predicted that bitcoin may extend its plunge to $8,000.
Like Star Wars, Bitcoin could come back strong.
Novogratz also said that bitcoin could reach $40,000 within a few months. Goldman Sachs Group is setting up a trading desk to make markets in digital currencies such as bitcoin. Bitcoin futures are now traded on the CBOE and CME.
If you’d like to read an article on the price history of cryptocurrencies, click here.
In any event, don’t forget that you’ll owe income taxes on Bitcoin when you’re ready to sell and that’s where we come in. Thanks to my cryptocurrency tax consulting, I was the #1 attorney in Miami and #16 attorney in the US this week by profile views on martindale.com.
I also was recently awarded a Gold Client Champion Award for 2017. Please visit my site if you’d like to discuss your cryptocurrency holdings such as Bitcoin, Ethereum, Bitcoin Cash, Ripple, IOTA, Litecoin, and Dash. Contact Page.
FYI By the time I finished this article, Bitcoin was trading at $14,839.75 at 11:29 PM.