Bitcoin plunges under $10,000 in worst drop in 30 days. What’s driving it?
Here are several reasons why the cryptocurrency markets are falling, so you can choose your favourite.
It's a red day on the cryptocurrency markets with Bitcoin experiencing its worst one-day drop since 16 July. But it's still above what looks like, if you squint and draw lines in various places, some kind of support level at $9,400. By contrast, the prices of Ethereum and other cryptocurrencies are sliding much more loosely.
There are various possible culprits for the fall, so you can choose your own depending on what flavour of explanation jibes best with you.
The markets breathed a minor sigh of relief at hints of a brief cease fire in the ongoing US-China trade war, with the US delaying some China tariffs on household goods to avoid pushing prices up for shoppers before Christmas.
Whoville-based pundits speculate that President Trump's heart may have grown three sizes that day.
These signs may have seen some nervous traders shift money from Bitcoin back to more traditional markets.
"Now that trade tension with China has eased, the pressure on the yuan is off. Those who bought Bitcoin to speculate on Chinese safe haven buying, which never happened, are taking their chips off the table," suggested Peter Schiff.
That said, it's not as though yesterday's events are really enough for anyone to properly take safe haven buying off the table. Argentina's abrupt recent crash saw Bitcoin trading at a premium there, and the world's first negative interest rate mortgage (a spicy -0.5% 10 year mortgage from Denmark's Jyske Bank) just launched, which is probably the single clearest way a bank can say "we expect things to get worse before they get better".
Elsewhere, just about all other signs point to a recession.
The ASX200 experienced its worst day in 18 months following the first 2 and 10 year inverted bond yield curve since 2007, and at the same time wage growth has stalled, retail sales are at their weakest since 1991, new vehicle sales have declined for 6 months straight, mortgage delinquency rates are growing and technically Australia is in a per capita recession already.
The current affairs fan
Facebook's Libra cryptocurrency looks increasingly likely to stall out. This is thought to be bad news for Bitcoin, because much of Bitcoin's rise in recent months can be attributed to Libra. That's not to say it should be, but it definitely can be.
Elsewhere news broke that the SEC has delayed its Bitcoin ETF decisions once again, which could theoretically have come as a surprise to someone somewhere.
All the money in the world is gradually being lost behind cosmic couch cushions and going wherever it is that loose socks go, and then being periodically rediscovered whenever a country moves house or rearranges the furniture. This is how the planet can simultaneously have too much money and not enough.
Either way, Bitcoin is falling but altcoins have it worse.
A special shout out to Lisk for chalking up a massive 35% loss in the last 24 hours, but really, anyone who's down double digits is a winner.
Disclosure: The author holds BNB, BTC at the time of writing.
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