Drop in Bitcoin a lesson to investors

SOME believe the recent drop in the cryptocurrency Bitcoin might be a good thing.

“It teaches people to be careful and that this cannot only go up‚ but that this can come down‚ and come down a lot‚ as well,” said economist Dawie Roodt.

Bitcoin hit a four-week low yesterday after dropping by 14% and is currently down more than 40% from its record highs in mid-December.

Reuters reported this comes amid fears of a regulatory crackdown after reports that South Korea’s finance minister Kim Dong-yeon had said banning trading in cryptocurrencies was still an option.

Roodt believes the drop can also be attributed to the public spending extra time and money over the December holidays on cryptocurrencies. “It was the man on the street that drove up the price of Bitcoin.”

Roodt believes the interest subsided with the start of the new year. “This does not mean it is the end of cryptocurrencies‚” Roodt said. “Bitcoin is becoming is becoming more formalised … It means the volatility should become theoretically less.”

Roodt encouraged the public to buy Bitcoin or other cryptocurrencies such as Ethereum despite their fluctuations.

“Don’t see it as a money-making opportunity. See it as an opportunity to learn a new technology.”

A Durban auditor said that while he was concerned that the value of some cryptocurrencies‚ including Bitcoin‚ had plummeted‚ it was “just a correction”.

Another buyer said he was worried about the decline‚ having lost money on some of his cryptocurrency invest

“Initially I made a decent bit of money‚ until I started trading because I was greedy.

“It’s just so difficult to predict when the price fluctuation is going to take place.” —