The value of the virtual currency bitcoin soared in 2017, reaching almost $20,000 – or £14,391 – in December, reported the Express. That was up from a value of only about $1,000 in March 2017, to cite a figure from CCN. Nonetheless, Bitcoin has recently faltered as state bodies have taken issue with the currency. Is this a sign that the bitcoin boom has now come and gone?
Bitcoin’s value has risen more than a bit…
In January, reports that South Korean regulators were seeking to ban crypto trades led various top cryptocurrencies – as virtual currencies are otherwise known – to crash. The crypto market lost up to $300 billion – or £216 billion – in total market capitalization, as Ripple and Ethereum plummeted.
These tokens fell yet further in value in the wake of fears that the Indian government would also issue crackdowns. The incredible volatility of bitcoin has led financial experts to advise against buying and trading with this currency, which they have deemed a bubble on the verge of bursting.
Financial watchdogs of the European Union are also keeping a close eye on the currency. European Commission vice president Valois Dombrovskis has drawn attention to bitcoin’s “clear risks for investors and consumers associated with price volatility”.
Will bitcoin stumble or keep rising?
There is a reason to believe that bitcoin’s value could be about to hit a ceiling. Referring to the value’s drop in January, financial expert David Garrity has commented: “From a trading point, the sentiment is driving the market because, as of yet, we don’t necessarily have mass adoption on the part of bitcoin for payment purposes.”
Nonetheless, Bitcoin appears to have weathered the storm relatively well by historical comparison. Chinese Angel Investor Cai Wensheng, who gathered 10,000 bitcoins after the January crash, has said that even a further fall for the currency’s value in March was not a major concern.
In an interview, he pointed out that, while bitcoin’s value touched a nadir of $6,000 that month, this remained six times the value in March a year earlier. Bitcoin trader Arthur Hayes has even forecast that the value will skyrocket to $50,000 this year.
In an explanation quoted by the Express, he insisted that “people will want to get involved”, adding that the $50,000 level is achievable because “more people are going to put small amounts of money into this base. This is a retail-led phenomenon.”
How should you react to the bitcoin situation?
As a businessperson, you might understandably be unsure about how to react to bitcoin. Are you contemplating accepting it as a currency payable by your customers or clients? Alternatively, you might be considering investing in it, though you should probably tread with caution.
However you treat bitcoin, you should remember its instability, which could increase the urgency that you help stabilise your company by properly insuring it. An insurance broker can help you to learn more about how to source insurance you want – or perhaps even legally need – at the right price.