Despite some 30% crashes in 2017, bitcoin managed to increase by total 1,400% last year, conquering the world’s financial stage. Banks are becoming more aware of bitcoin’s “decentralized” danger, venture-capital firms have their hand in substantial crypto investments, whereas ordinary people hope to make fortunes thanks to the most prominent cryptocurrency around the globe.
However, lots of experts are concerned about bitcoin’s unstable nature. After skyrocketing to the all-time height of $20,000 last year December, bitcoin’s price plunged down to less than $12,000 per unit just in a few weeks after the triumph. Daily bitcoin’s price wavering could be $1,000, and more disputes concerning the crypto bubble grow given such volatility.
But if we look at bitcoin’s history, we won’t be that much surprised, believes Yahoo Finance contributor Rick Newman. According to his words, within 2017 bitcoin was more stable than since its release in 2009. Newman argues that bitcoin is becoming less volatile and much more steady.
Bitcoin’s Historical Gyrations
Back in 2010 the bitcoin public trading first was started. Since that moment, Yahoo Finance explored the price gyrations of this cryptocurrency. In the chart below, you can see how bitcoin’s value was changing over a rolling one-month period through the ending of the last year:
Now it is clear that the most unstable days for bitcoin were not in 2017 but 2011 and 2013. Around seven years ago from now, bitcoin’s price skyrocketed by 720% just in the space of one 30-day period. There were some price oscillations around five years ago, which were followed by a comparatively calm period. Sure, in 2017 there were some more relative swings, but they cannot be in par with cryptocurrency’s early times.
Sure enough, right now there is too much wealth at stake, that’s the primary difference, as Newman emphasizes. To take a handful of examples: back in 2011 bitcoin surged up to $8.20 just from $0.93. In percentage terms, it is a massive gain. However, one could not purchase with this crypto money more than some cups of a warm drink. But imagine if now bitcoin soared by 720% – it would surge up to unbelievable $100,000.
The Yahoo Finance columnist believes that currently, bitcoin embodies the money which changes the life. So here is the overwhelming chart, representing bitcoin’s price since the start of its public trading back in 2010.
Nevertheless, if we talk about bitcoin’s colossal price drops, we should pay attention to its the most significant 30-day decline in 2014. Then, bitcoin decreased by 88% between the first two months of winter. If in January 2014, bitcoin cost $962, by February the price went down to $112, for a loss of $850 per unit. Should such a drop occur today, the loss would be over $12,000 on one coin. Newman also warns, that similar plunge has all the chances to happen again, once it happened once.
Yes, bitcoin is less steady than commodities, stocks, and bonds. But in comparison to itself, bitcoin seems to be less volatile than humans can imagine. But what is for sure, that bitcoin as an asset will never behave like other objects for investments, just because it’s too different and needs to be explored.
Charts Source: Yahoo Finance