After steadily climbing in value over the last few weeks, the value of Bitcoin is taking a big hit. At the time of writing, the cryptocurrency is trading at a low of $5992, almost reaching the price set on June 24th of $5785.
However, it is not the only cryptocurrency to experience a massive slump, as the price of ETH is sinking to a 9-month low, below its $300 mark. Other cryptos to be hit by the drastic fall in value include XRP, LTC, and EOS. In the case of XRP, its current price of $0.30 represents a loss of 90% from its all-time high that was set in December 2017
As BTCs value plummeted yesterday, CSO of digital asset management firm CoinShares, Metlem Demirors said:
“New technologies that shift the paradigm take a long time to really understand, and the narrative around Bitcoin is really hard to grasp. Really the only metric we have for most cryptocurrencies is the price, and the price is such an imperfect metric. What does actual utilization look like? That’s really the struggle for crypto right now.”
It has been suggested that the instability of Bitcoin and other cryptocurrencies value is not a cause for concern but rather it should be compared to early internet stock such as Amazon or Microsoft. Whilst they are successful now, in their early stages they took significant hits to their initial highs, after the dotcom bubble burst.
“What we saw in crypto was this massive run-up, where everyone got ‘FOMO,’ or fear of missing out, as we like to say. What it caused is a speculative bubble,” Demirors said.
Now that the speculative bubble has burst, capital is being ploughed into real businesses that are serving a valid purpose. In time, it is expected that the market will stabilise as crypto and its underpinning technology find its feet in the world.
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