The cryptocurrency Bitcoin generated considerable interest in mainstream financial media as it neared $5000 per “coin” at the end of August. With a 500% increase over the past year, many naïve buyers have rushed in recently. But over the past two weeks they have discovered that “what goes up can go down”. Bitcoin plunged -38% from September 1 to September 14 (see the following chart). The precipitous decline followed comments from Chinese officials that the government was looking to ban exchanges dealing in Bitcoin, and JP Morgan Chairman Jamie Dimon called Bitcoin a “fraud” during an appearance on CNBC. So, if you are tempted to invest in Bitcoin, just be aware that eye-popping rises can be followed by stomach-churning declines! The following chart (from coinbase.com) tells the story of 9/1 to 9/14 - the two weeks in Bitcoin hell.
Two Weeks in Bitcoin Hell
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September 18, 2017