What a difference a year makes for bitcoin.
In December 2017, bitcoin prices hit a record high of just under $20,000. Flash forward to December 2018 and bitcoin is now trading a little below $3,400. That’s a more than 80% plunge. Bitcoin is at a 15-month low.
But prices have really gotten whacked this week, falling nearly 20% in just the past five days alone.
Bitcoin isn’t the only cryptocurrency getting hit either. Ripple/XRP, ethereum, stellar, litecoin and numerous other cryptocurrencies have plunged in the past week.
Little tangible news can explain or justify the current crypto carnage.
One possible reason is that a pro-crypto member of the Securities and Exchange Commission warned at a conference this week that she’s fighting an uphill battle trying to convince the rest of the SEC to approve more bitcoin exchange traded funds.
“Don’t hold your breath. I do caution people to not live or die on when a crypto or bitcoin ETF gets approved,” said SEC commissioner Hester Peirce.
That’s not a good sign. Peirce’s comments probably mean hopes for a bitcoin ETF getting approved anytime soon have been dashed, according to long-term bitcoin bull Naeem Aslam, chief market analyst with Think Markets UK Ltd.
Aslam argued that bitcoin prices could wind up plummeting below $2,000 and even test the $1,500 level.
“Simply put, the bad news keeps coming just like cockroaches coming out of a hole,” Aslam wrote in a report.
More downside could be ahead simply because the price of bitcoin and many other digital currencies just ran up so sharply last year. It was a parabolic move that defied reason, similar to internet stocks in the late 1990s – a classic mania.
Nearly two-thirds of money managers surveyed by asset management firm Natixis still thought that cryptocurrencies were a bubble, the firm reported this week.