Last week, those who were brave enough to short bitcoin got an early Christmas gift. That’s because the most expensive and widely talked about cryptocurrency dropped almost 20% last week and even losing 30% at one point on Friday. This means that many speculators are now begging the question-could this be the beginning of the end of bitcoin’s run?
In our previous blog, the author noted how much of the damage could be attributed to bitcoin cash. Bitcoin cash is a spinoff of the original. However it is also a faster cheaper (for now) version of bitcoin that was to be made available for direct purchase on Coinbase, the world’s largest bitcoin exchange, without having to buy bitcoin first. This one announcement put a serious dent in the value of classic bitcoin.
But something else also happened last week. In a less publicized story, Ex Goldman Sachs Group Inc. and Fortress Investment Group LLC macro trader, Michael Novogratz, announced that he is suspending his initiative to launch a cryptocurrency hedge fund while making the bold prediction that bitcoin could continue dropping to as low as just $8,000.
In a phone interview to Bloomberg, Novogratz explained “We didn’t like market conditions and we wanted to re-evaluate what we’re doing,” Novogratz said Friday in a phone interview. “I look pretty smart pressing the pause button right now.” Bitcoin plummeted to a low of $10,776, before rebounding to $14,303 at 4:04 p.m. in New York.
Dec. 1 was the last time bitcoin went below $10,000. The dip happened right after the U.S. Commodity Futures Trading Commission announced that they are allowing trading in bitcoin futures.
There could however be a silver lining. That’s because global investment bank Goldman Sachs has just announced that they will be setting up a cryptocurrency trading desk. This move escorts cryptocurrencies like bitcoin further into the mainstream realm adding another layer of legitimacy to digital coins like bitcoin. And while some could argue that an initiative of this nature from a bank that boasts a reputation of being ‘too big to fail’ could add even more value to bitcoin, it is equally important to remember that other cheaper faster cryptocurrencies will be available to trade at that desk as well.
Found this article interesting?
Want to see how quickly you can take your first steps in the world of online trading?
iFOREX has one of the most popular training packages.