For Bitcoin investors, these are the times that try one’s soul.
After surging to almost $20,000 in December following the introduction of regulated futures contracts in the U.S., the world’s largest cryptocurrency has lost more than half its value, plummeting to as low as $7,614 on Friday. It regained some ground on Saturday, rising 7.5 percent to $9,290.15 as of 2:58 p.m. in New York, according to coinmarketcap.com.
Particularly hard hit have been those who got swept up in the mania just before what skeptics ranging from Jamie Dimon to Nouriel Roubini have labeled as one of the biggest asset bubbles in history began showing signs of deflating. Selling by “weak hands,” as latecomers are sometimes called across the investing world, contrasts with the view of early advocates pledging to HODL — one frenzied trader’s misspelled entreaty to hold onto the tokens during an earlier rout that’s become the mantra of Bitcoin purists.
Bitcoin’s rise in mainstream consciousness was brought on in part by retail investors’ fear of missing out after viewing the approval of futures as an endorsement by the establishment. As more novice investors jumped in, Bitcoin shot above $10,000, then $15,000, then as high as $20,000 on some exchanges, in a span of only a few weeks.
Some of Bitcoin’s biggest backers even warned the euphoria had gotten out of hand. Billionaire Mike Novogratz, who shelved his plans to open a $500 million cryptocurrency hedge fund and instead wants to build a crypto merchant bank, warned that Bitcoin would fall to as low as $8,000. Thomas Lee of Fundstrat said the cryptocurrency would slide to as low as $9,000 before shooting back up.
Recent hacks and tightening regulation have “weighed on confidence,” Lee said in a telephone interview Friday. “Investors are staying on the sidelines until there’s some visibility, but nothing fundamental has changed. It’s healthy; you need drawbacks sometimes as nothing goes up in a straight line.”
Those highs helped increase the scrutiny regulators as the total market capitalization climbed to more than $800 billion at one point in January. A steady steam of headlines since about officials cracking down on the market sparked jitters and caused those same retail traders who got in at the highs, to panic sell, hoping to avoid even greater losses.
But the hordes of people wanting to trade crypto, which repeatedly crashed San Francisco-based exchange Coinbase Inc. when the market was rallying, are still there. More than one million people have signed up for “early access” to the brokerage app Robinhood Financial’s cryptocurrency section since it said it would offer no-cost trading in digital coins last week.
Up 800%
Charles Hayter of research website CryptoCompare sees good news on the horizon, as Bitcoin developers are making breakthroughs in technology that will help the network process transactions faster. Also, Hayter said an emerging regulatory framework and investor protections will be positive for cryptocurrencies in the long term.
Meanwhile, many investors who got in earlier aren’t budging. Bitcoin was worth about $1,000 at the beginning of last year and about $450 at the start of 2016, so those who bought then are shrugging off these losses — they’re still up more than 800 percent.
“It’s just early-year market blues,” said David Mondrus, a long-time crypto enthusiast and chief executive of Trive, a blockchain-based research platform. “In 12 months, we won’t even remember it.”
For more Bitcoin coverage: Bitcoin Whipsaws Investors as Bubble Shows Signs of Bursting Roubini Says Bitcoin Is the ‘Biggest Bubble in Human History’ Long Blockchain Backs Off Bitcoin Mining as Cryptocurrency Falls Big Investors Circle Telegram Offering as Crypto Insiders Pass To the World, They’re Crypto Bros. To Each Other, a Brotherhood
Source :-http://fortune.com/2018/02/03/bitcoin-newbies-are-getting-crushed/
Buying above 12K was a little crazy. Too far too soon.
Thank you for reading
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https://www.bloomberg.com/news/articles/2018-02-02/bitcoin-newbies-are-getting-crushed-as-old-timers-pledge-to-hodl
The bad news is that many of the newbies will be "double crushed". They will have lost a lot and will be fearful or impatient so they will jump ship. This will leave a terrible taste in their mouths that they won't want to experience again, so they will stay out of the crypto market. Then the market will go to new all time highs and they will be left behind.
The big loss will not be the one they take now, but he huge one they will take by rejecting the future of crypto. That is sad as they could have been early adopters, the people who 5 years from now everyone will be envious of.
It is a real pity that at the same time exchanges can't keep up with new customers and interest in crypto's has reached an all time high, that misinformation from the main stream media, combined with a normal cyclical correction became a crash.
Of course I don't think for one moment that was a coincidence. It is absolutely amazing how many news stories got it wrong the on their original reports. Sure they clarify AFTER they have done their harm. Can you imagine how much better off the crypto space would be had all the "bad news" in the past few weeks been accurately and objectively reported?
Sure the old hands just Hodl through it, like always, but the newbies who bought the top and sold the FUD bottom, got totally screwed over. What's worse is the timing was so perfect for this "attack" that we may all suffer a bear market for weeks or dare I say it months.
The more I see that the fear is real on the part of the establishment, the more I see the promise of crypto is also real. This coordinated attack is really quite impressive.
👍