One of the big topics in the financial world over the past two days has been the rapid drop of bitcoin. The cryptocurrency went down by $600 in a single day. It was worth slightly more than $10,000 during the summer. However, things have not gone well since then. There are a number of factors that have contributed to its sharp decline. First of all, there are a variety of countries that have come out against cryptocurrencies and proposed laws to ban their trading within their borders. This will always cause bitcoin to drop when negative news about trading is released.
The status of the Facebook cryptocurrency project called Libra has also come into play. There are many people who believe that Facebook could help to push bitcoin into the mainstream with the release of Libra. However, the social media giant has experienced quite a bit of resistance to its plans from politicians around the world. Facebook CEO Mark Zuckerberg faced some tough questions from politicians about Libra. The news of his remarks also played a role in bitcoin declining. The two events were definitely linked because the price of bitcoin started to fall while Zuckerberg was giving his testimony.
The bad news for people who have invested money into bitcoin is that the price might not have bottomed out yet. There are many financial experts who believe that the price might keep falling for the foreseeable future. Bitcoin is now at its lowest value in five months. Investor confidence is very low right now because it is not clear when Facebook’s Libra will launch. In fact, there is very serious doubt that Libra will ever get off the ground. Several large financial services that were backers of Libra dropped out of the project recently. Therefore, many experts took that as a sign that Libra could be doomed.
Only time will tell if bitcoin does indeed go down to the lowest it has ever been. In the meantime, there are a few people in the media who have remained optimistic about the possibility of a huge rebound for bitcoin in a short period of time. Bitcoin has been a very hard currency to predict. It has proven to be extremely volatile since it was fist introduced a decade ago. People who are bitcoin fans will simply hold onto their investment and hope for a rebound. That has worked in the past.
