Image via Shutterstock
Welcome to our new column, Crypto Currently. A few times a week we'll round up the latest developments in cryptocurrencies around the world and try to make sense of it all. What's happening and where is it going? Let's find out…Bitcoin is now almost exactly where it was six weeks ago, thanks to more talk of an Asian crackdown. "The shutdown of virtual currency exchanges is still one of the options," South Korean Finance Minister Kim Dong-yeon told Yonhap News on Tuesday, sparking a sell-off that saw Bitcoin shed some 20 percent of its value. Then, over the last 24 hours, the cryptocurrency market lost around $160 billion leaving investors asking is this it?Well, probably not. But let’s just take a moment to zoom out and remind ourselves that 2017 showed us no one has a clue.Depending on who you ask, cryptocurrencies are either just a classic case of speculative hysteria, or they’re the future of international finance. It’s either the top of the world, or bottom of the canal.Bitcoin started 2017 hovering at around the AU$1,000 mark. It then rose steadily and ballooned in September, prompting JP Morgan CEO Jamie Dimon to label the digital asset a “fraud.” But then Bitcoin went on to appreciate by a factor of three and a half before the year’s end, hitting a high of nearly AU$25,000 in December. And it was probably this explosion that prompted Dimon to retract his comment. "The blockchain is real," he told Fox Business on January 9, just a week before it fell 20 percent.So where to from here?Bitcoin traders may have developed a low boredom tolerance and could bail into other coins—or out altogether—if their net worth continues to stagnate. Ripple was flat before falling 46 percent yesterday, while Ethereum was up an impressive 72 percent in the past 15 days. But in such a volatile market a continued downward trend for Bitcoin could spook the remaining HODLers, who still retain 98.6 percent of its value, triggering the oft-predicted collapse.But then again, massive demand is building at these bargain prices and the next explosion of euphoria could be about to kick off, sending the price skyward. After all, Kay Van-Petersen, the Saxo Bank analyst who correctly predicted Bitcoin would reach US$2,000 in 2017, is now saying 2018 is the year currency will hit US$100,000.So let's just hope South Korea and China’s killjoys stay out of it. Let the party roll on, say I. Sure the dot-com bubble destroyed some life savings, but out of those ashes some buds eventually flowered. Bond yields and Price Earnings ratios put most people to sleep, so let the thrill seekers have their ride. And if Asian regulators can just keep quiet, the ride will continue. Or at least for a little while.Simon is on Twitter
Advertisement