The crypto crash: what the pundits say
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Bit volatile
“It has been another week of vertiginous swings in the prices of bitcoin and other cryptocurrencies,” said The Economist. This time, though, “the moves have mostly been downwards”, with falls of over 20% on some days. Having peaked in December at $19,434 per coin, the price of bitcoin plunged as low as $9,000 on fears of a trading ban in South Korea, before stabilising this week at about the $11,000 mark. Other leading currencies, including ripple, ethereum and litecoin have also taken a battering. Views on whether the crash will continue are as divided as they were during bitcoin’s “giddy climb”.
Bleak expectations
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Even in its present comparatively wizened state, bitcoin has still risen a massive amount over five years. Some reckon it remains “in a bubble on the brink of bursting”, said Jason Murdock in the International Business Times. The price could fall as low as $1,000 over the next 12 months, according to Wall Street investment chief Peter Boockvar of the Bleakley Advisory Group, particularly if interest rates rise suddenly (this would bring its price down to a level last seen in January 2017). But Boockvar believes the financial hit on stock markets and the wider economy is likely to be “minimal”, with only heavily committed investors affected.
Spooked
Certainly, many ordinary punters were spooked by last week’s crash, said David Byers in The Times. “Europe’s leading gold traders reported a fivefold increase in demand from people wanting to exchange bitcoin for gold” – partly because many have now gripped how difficult it is to realise bitcoin profits. “For nervous bitcoin owners, unable to use the currency to buy the vast majority of consumer goods, to invest in property or to attain mortgages” because of money-laundering restrictions, gold has obvious “appeal”. “The recent dip has shown many new investors the reality of cryptocurrency volatility,” said Benjamin Dives of the London Block Exchange, which is planning to launch a sterling-to-cryptocurrency exchange. Dives reckons the main new currencies will ultimately become more “stable” as they inch their way into the mainstream. Expect multiple gyrations along the way.