The price of a single bitcoin is showing signs of recovery after its worst week since 2013 last week. At 14:02 UTC, a single bitcoin was being traded at $15,800.13, almost unchanged from its price 24 hours ago.
Over the Christmas weekend, it passed the $16,000 mark on some exchanges. The cryptocurrency had dropped to lows of $12,148.92 last Friday. That price represented a decline of more than $7,000 in five days since a record high on December 17. (See also: Bitcoin Price Continues To Slide After Brief Dec. 23 Recovery.)
Bitcoin rival bitcoin cash was down by 1.28%. But the remaining top-10 most-traded cryptocurrencies took their price cues from bitcoin and were up by double- and single-digits. Ripple and IOTA led the pack and increased by 15.88% and 11.60% respectively. (See also: How Did Ripple's Price Perform In 2017?)
The overall market cap for cryptocurrencies continued inching upward over the weekend and was $607 billion at 14:16 UTC. Last week, it had dropped to $432 billion on the back of a sea of red for most cryptocurrency prices.
Making Sense Of The Fall In Bitcoin’s Price
For now, however, traders and investors are wondering about the implications of the fall in bitcoin’s price. Is it a correction or a bursting of the hype that has led to the cryptocurrency surging by more than 1800 percent in a single year?
In a Bloomberg View piece, former PIMCO CEO Mohamed El-Erian provided some context. According to him, a “healthy” correction would help bitcoin “develop deeper structural roots (with institutional investors), reduce the probability of a heavy-handed regulatory response, and lower the threat of a price crash.” A drastic collapse, on the other hand, would rival “even the biggest investment bubbles in history,” El-Erian said.
But individual investors are still continuing to pile onto the cryptocurrency bandwagon. Three exchanges - Bittrex, CEX.io, and Bitfinex - have stopped accepting new users citing degradation in quality of their support services due to the surge in numbers. (See also: 5 Live Bitcoin Exchanges). The move is a significant one for bitcoin prices since Bitfinex is among the largest cryptocurrency exchanges in the world and claims to have the largest trading volume in U.S. dollars.
In the meanwhile, the government regulation screws continue to tighten on bitcoin. “I think it (bitcoin) looks like a bubble, smells like a bubble, acts like a bubble, and feels like a bubble,” said Shumel Hauser, director of Israeli Securities Authorities, as his agency barred companies trading in bitcoin from the Tel Aviv Stock Exchange.
Veteran gold analyst Michael Dudas told CNBC that bitcoin was a “speculative investment” right now. “There’s still just a lot of misunderstanding or a lot of education required about the supply of these different cryptocurrencies [and] how it’s going to play out over the longer term,” he said. According to Dudas, government regulation could “fracture” the market a little bit.
But those prognostications are not deterring bitcoin enthusiasts. As bitcoin inched upwards, John McAfee reiterated his prediction of $1 million price target for the digital currency by the end of 2020.