Could Bitcoin Be About to Crash?


Bitcoin has been THE topic of financial news for months now as its meteoric rise has gone on, and on and on. I’ve followed the rise all year and if I’m being honest, I do feel that the online currency has a lot of merit and I can see its appeal. At times, though, you just have to step back and ask yourself, does this really feel natural, or are we in a gold rush mentality? Could the price of bitcoin be about to crash?

The problem with bitcoin is that there are no real underlying fundamentals to tell you whether or not the value that has been attributed to it is reasonable or not. When you invest in a company you can look at its profits, its assets and its debts, to gain some idea as to whether your investment is a good one or not. With bitcoin – at least at this point – you may as well just stick your finger in the air and try to work out which way the wind is blowing. There are no real fundamentals which allow you to make an educated decision as to its true value, and you’re really just banking on the fact that people are going to be willing to throw more and more money at it, to keep pushing the price up.

At some point, however, this will stop. Why? Because when the price does eventually start to fall, people will get nervy. People will start to sell up and cash in on the profits they’ve already made before the price drops even further. If the price continues to fall, you could then start to see some panic selling. It might happen tomorrow, next week, next month or next year, but logic says that it will happen.

We’ve seen this before, haven’t we? In early December of 2013 the price of bitcoin peaked after a massive rise and then gradually dropped off over the next year or two to around 20% of its value at the height of the boom. Could this scenario play out again?

I have followed the market for a while but I’m certainly not an expert in crypto. What I would say, though, is that it feels as though there’s a little too much heat in bitcoin right now and this leads me to think that a big correction could be on the horizon.

What do you think? Could bitcoin be about to crash?

One Response to Could Bitcoin Be About to Crash?

  1. John says:

    Nice article. My thoughts are that Bitcoin will continue to go from strength to strength. The charges imposed by banks for things such as money transfers are out dated and rightly so being challenged.

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