Bitcoin bubble is popping
There is a bubble in the world of Bitcoin and it is popping. Or at least the market is starting to correct itself due to several serious issues with Bitcoin.
On Monday December 18, 2017, The Guardian posts a story warning that the talk of a bubble is growing louder.
On Tuesday December 19, 2017, Coinbase releases a blog post about possible insider trading. The blog details their trading policy and what they plan to do about possible insider trading.
On Wednesday December 20, 2017, CNN Money ran a story covering Coinbase's investigation into possible insider trading along with video interviews and expert input.
On Thursday December 21, 2017, Bank of Japan Governor Haruhiko Kuroda said that the cryptocurrency's rapid rise was "abnormal" which was the same thing being said by economies in the Singapore, Australia and South Korea.
These issues spooked some investors causing them to start selling while fewer people were buying. This in turn caused the price to start dropping slowly.
When users of the various exchange web sites started seeing warning messages saying that trades would be delayed, the sell off started happen rather quickly. Now these warnings could be caused by the technical issues described by the companies. But they could also be caused by the companies simply not wanting to pay out right away or even being unable to pay out.
Regardless of the actuall cause behind these messages, it is a very unsettling thing to have your money heald hostage by a company you trusted with little to no recourse. By the early hours of Friday, the value of Bitcoin had fallen to $11,833 which is a 41% drop from the high of $20,089 which was reached on the previous Sunday.
Right now, what we are seeing is a series of drops, followed by people buynig at the lower price in hopes of things going up. That in turn causes the price to start climbing again. But when that upward trend doesn't continue, the value drops again.
It is unlikely that this drop will mark the end of Bitcoin. There are simply too many people with too much skin in the game for this to go under at this time. What is more likely to happen is that the value will drop a bit more then level off for a while before people start buying again.