Coming after a frenzied run-up the hand wringing is no surprise
On the big El Salvador day for Bitcoin to go live, for the first time as legal tender, naturally there were glitches. And the predictions for crypto in general and Bitcoin in particular to surge on the news were, backwards.
The longstanding stock market adage “buy on rumor, sell on news” once more proved itself as what is now being called a “crypto flash crash” knocked around $400 billion off the market cap of the previous 24 hour period, or almost 12%, as per CoinMarketCap at the time of this writing.
The president of El Salvador announced that his government used the dip to buy an additional 150 Bitcoin, above the 400 he had announced on the previous day, bringing the total to 550.
From CoinMarketCap:The global crypto market cap is $2.07T, a 11.91% decrease over the last day
- The total crypto market volume over the last 24 hours is $227.12B, which makes a 66.15%increase.
- The total volume in DeFi is currently $30.41B, 13.39% of the total crypto market 24-hour volume.
- The volume of all stable coins is now $179.83B, which is 79.18% of the total crypto market 24-hour volume.
- Bitcoin’s price is currently $46,893.62.
- Bitcoin’s dominance is currently 42.55%, an increase of 1.17% over the day.
By 3:30 PM ET on Tuesday Bitcoin bounced back, the “discount” ended, for now, and recovered to around $47,000 after dipping to $42,870. The recent highroad been $52,732, with the all time high from April still intact above $63,000.
I many ways it seems as if Bitcoin and Cryptocurrencies appeared suddenly in 2021 out of the head of Zeus. Protean and fully formed, with billions and trillions in market caps, and all your sisters, brothers, cousins and even the Uber driver climbing aboard.
And the FOMO blog posts, where every hour an innocent reader is assaulted by a story, perhaps true, perhaps exaggerated and certainly foolhardy in retrospect, of an innocent putting their life savings into Dogecoin and suddenly having, theoretically, huge gains at their disposal.
Meanwhile, craggy faced, ancient stock market mavens would interject famous last words that now appear to be wise. However, all that notwithstanding, this week’s crash is nothing new or unexpected.
In reality, as can be seen from the graphic below, provided by Visual Capitalist, there have been so may crashes / corrections and doomsday prognostications since 2012 in Bitcoin that it seems like a miracle the there’s any thing such as Crypto at all.
There’s a reason it’s not dead and it’s in the DNA
The resiliency, far from a shock to those that have been around more than a fortnight, is kinda the point. When Satoshi Nakamoto built the system architecture of Bitcoin and since then inspired the over 8000 new crypto entities that have been developed, it was, just like the internet itself that was build to survive WWIII, supposed to be as indestructible as possible.
Like physical gold, which is considered have been adopted as a store of value partly due to its indestructibility and immutability (alchemy notwithstanding) the volatility and sometimes violent-seeming life story of Bitcoin is a necessary adjust to its role in finance, commerce and even individual monetary survival.
Not for the faint of heart, perhaps
While the mainstream and those forces opposed to the adoption or survival of Bitcoin and Crypto are out in force pointing to the “unsuitability” of Bitcoin and other cryptocurrencies for any “legitimate” use as a trade or savings vehicle, the progress so far, in spite of the obvious fact that volatility has always been baked in to the situation, is an obvious refutation of that viewpoint.
Will the current drop in dollar values relative to Bitcoin end it’s popularity and strip it of the respect it has thusfrar earned among many? In a word, no. In essence what is happening is, as many have foretold, what happens often and repeatedly, the excess attention and dollars that were pumped into crypto by you brother, sister, cousin and Uber driver are now getting blown out, since those were more speculation and psychosis than any kind of vote for viability or permanency.
And, why not? Where was to concern, shock and hesitation by the masses when the prices seemed to only rise for weeks and even months across so many products and coins it was impossible to keep count? Why was to feeding frenzy and the mania-like piling on not ignored as an anomaly?
The herd does as the herd will do. Diamond hands and Paper hands will ebb and flow as long as the rivers flow to the sea and humans herd like buffalo. And, in all likelihood, dollars and euros and yen will be long forgotten when the last bitcoin is transferred to the final wallet in the sky.
- Kim Kardashian: Marketing Genius or crypto cash-out?: Kim K Alt-coin ad getting unwanted attention from UK
- Crypto Crash on Bitcoin Day knocks $420 Billion off at Dip
- Bitcoin Nation? El Salvador is first to make it Legal Tender
- Reese Witherspoon Crashes into Cryptocurrency
- Elon Musk & Jack Dorsey finally agree to debate for the BitCurious
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