By Adam Rosenberg1 hour ago
Slow your roll, bitcoin.
The finicky cryptocurrency has skyrocketed in overall value throughout 2017, but its bumpy December continued in the run-up to Christmas. After posting an all-time high of $19,796 per bitcoin on Dec. 17, the price fell to $11,590 on Dec. 22, according to Coinbase data).
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It was the steepest decline of the year for bitcoin, losing more than 40 percent of its peak value reached just days earlier. The price has been creeping back up since then, and it continues to hover at around $14,000 as of Christmas Day, Dec. 25.
In a reflection of bitcoin’s volatility, currency exchange Coinbase temporarily disabled the site’s buying and selling features due to “high traffic” on Friday. It was the same day bitcoin’s value dropped dramatically, and the volume of activity on the site slowed down performance — a difficult situation for a business that hinges on the moment-to-moment shifts of an active currency market.
Even with all the activity, bitcoin has yet to fall below the record high it hit going into December 2017. It was valued at just shy of $11,000 per bitcoin on the first of the month, and it hasn’t dropped below that point even once in the time since.
That said, the dramatic ups and downs of December speak to the challenges prospective buyers should consider before they take a gamble.
Fundamentally, bitcoin is just internet money. Rather than depending on banks or individual governments, cryptocurrency like bitcoin is built on a distributed network of users controlling verified transactions known as blockchain-inspired.
Bitcoin’s steep price increase has led to plenty of online hype and search activity, which in turn has fueled more growth. But it’s also still driven by the same kinds of forces that power the stock market: more owners cash out as value increases, which in turn brings prices back down unless there’s more buyers.
Bitcoin and other cryptocurrencies like it have proven to be more volatile because the same hype that helps to build value also brings in customers that simply want to gamble on the hot, new thing.
Whether this is a viable alt-trading market or a bubble waiting to burst remains to be seen. But it’s increasingly clear that the general upward momentum of cryptocurrency in 2017 will continue to be tested by wild swings as the dispersed network of buyers and sellers tries to puzzle out investment strategies.