Christmas of 2017 will forever be remembered by crypto enthusiasts for the extreme market volatility displayed by Bitcoin and other digital currencies.
The festive season is in full swing and those who celebrate Christmas have enjoyed turkey dinners, presents under the tree and long Christmas specials on TV. But for many of us involved in the world of cryptocurrencies, this has been one Christmas Special we will never forget.
November was an extraordinary month, as Bitcoinsmashed barrier after barrier on its way to the $11,000 mark. Despite multiple corrections, time after time, the virtual currency bounced back from volatile swings in price.
Some called it a bubble, others said is was just the tip of the iceberg, but no one predicted the wild ride Bitcoin would endure in the weeks leading up to Christmas.
Bitcoin futures launch
Last month the price of Bitcoin reacted strongly to the news that the Chicago Mercantile Exchange (CME) and Chicago Board Options Exchange (CBOE) were planning to launch Bitcoin futures - which eventually led to a massive bull run. Both mainstream exchanges successfully launched their new offerings and in both instances the price of Bitcoin reacted favourably, although the CME launch a week after CBOE had far less of an affect on the price of Bitcoin.
The general sentiment ahead of the futures’ launch was that mainstream financial institutions openly trading on the Bitcoin market would cause a greater stream of money to flow into Bitcoin, raising the price. Indeed, that is exactly what happened - for a time. But not long after Bitcoin hit the meteoric $20,000 mark, the market underwent a massive correction, sinking down to just under $11,000 on Friday, December 22.
It wasn’t just Bitcoin that endured a wild ride, as the whole cryptocurrency market saw losses, with the combined market cap dropping $200 bln in a single day.
Coinbase and Litecoin
Another curveball that had some effect on the market was the surprise announcement that Coinbase was launching Bitcoin Cash trading on it’s platform. That saw the price of Bitcoin Cash surge - but the integration was soon marred by scandal.
Coinbase had to suspend buy and sell orders on its GDAX exchange due to significant volatility. A day later, the company confirmed it would also investigate allegations of insider trading by employees, who were prohibited to trade Bitcoin Cash in the lead up to the launch.
Meanwhile Litecoin founder Charlie Lee made two controversial moves. First, he tweeted his belief that a multi-year bear market was coming which could see Litecoin drop as low as $20.
Ok, sorry to spoil the party, but I need to reign in the excitement a bit...
Buying LTC is extremely risky. I expect us to have a multi-year bear market like the one we just had where LTC dropped 90% in value ($48 to $4). So if you can't handle LTC dropping to $20, don't buy!
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