Thomas Penney

For what seems like a decade now, tech bros have been talking about the potential for cryptocurrencies like Bitcoin to change the world. However, recent weeks have seen the price of Bitcoin, which went through a historic rise in 2017, come crashing down.

 

Major market corrections have seen the price of Bitcoin fall by 45 percent, and it took the rest of the cryptocurrency market with it. It should be fairly obvious that the market was heading for a bubble, despite insistences that block chain currencies were going to revolutionize the economy that the market was in a bubble. Bubbles, as many know, burst.

 

Some are speculating that stricter regulations in Germany and South Korea are driving this, along with increased involvement from the Securities and Exchange Commission (SEC). Regardless; a steep fall like this was nearly inevitable.

 

Though many investors are treating cryptocurrency like a different kind of asset, it seems basic economic principles hold true. Fear and doubt surrounding the long-term value of Bitcoin have spooked some investors, as happens with many investment options that rocket up suddenly in value.

 

It remains to be seen if this is a short-term lull or a real disruption in the market for owners of cryptocurrencies. The good news is that most people who bought in before Bitcoin hit the $5000 USD mark can still sell and make a tidy a profit. The bad news is that no one seems to have a great grasp on what regulation of this market will look like. Keep in mind, the appeal of Bitcoin, for many people, was the lack of regulation involved.

 

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