Bitcoin Begins To Recover After Nightmare November

Martin Green

Sunday, December 2, 2018 4:32 PM UTC

Sunday, Dec. 2, 2018 4:32 PM UTC

Bitcoin suffered a 37 percent drop in value in November, but it began to recover over the weekend and advocates hope it will rally soon.

Bitcoin has started to enjoy some green shoots of recovery after suffering the worst November performance in its nine-year history. The cryptocurrency lost 37 percent of its value during November, plummeting from $6,350 at the start of the month to just $3,975 on Friday. It creeped back up past the $4,000 barrier over the weekend, but the market is still reeling after the worst monthly decline in seven years. Bitcoin’s market cap dropped by $37 billion, annihilating investors and causing a headache for bettors that like to wager in Bitcoin.

Analysts are now speculating as to whether Bitcoin has bottomed out at $3,975, or whether it is due more pain before it consolidates corrects and begins to grow again. Some are urging investors to dump Bitcoin. Nouriel Roubini said everyone should “see the light” and get rid of their holdings before it tanks any further. UBS executive Paul Donovan said it is time to bury Bitcoin. “I think anyone with a high school education in economics has been a Bitcoin sceptic right from the start,” he said. “These things were never going to be currencies, they’re not going to be currencies at any point in the future; they’re fatally flawed.”

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Bitcoin is the biggest bubble & bust in history. Biggest as up 60X from 3 years before peak. Nasdaq was only 4X, so tiny bubble vs BTC. Even bankrupt South Sea was 8X. More similar to Mississippi (35X) that went bankrupt or Tulip-mania. BTC bust biggest/fastest too. Case rested! pic.twitter.com/OYLtIJ6dPq

— Nouriel Roubini (@Nouriel) November 24, 2018
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Bitcoin peaked at $19,650 in December last year and it has since shrunk dramatically to just a fifth of that. Since January it has lost 70% of its market capitalization and investors have suffered painful losses. However, Danny Scott, the co-founder and chief executive of crypto exchange and wallet provider Coin Corner, said he is not worried by its huge drop in value. “We’re not concerned about Bitcoin’s price plummet this month,” he said. “If we look back over Bitcoin’s short 10-year history, it has experienced many price fluctuations - something that is to be expected given that the industry is still very young. It’s widely known that Bitcoin has allegedly ‘died’ more than 300 times to date.”

He added that the “death” refers to predictions from critics that Bitcoin will not survive huge fluctuations in price. “Yet it has not died on any of those occasions and, instead, has continued to gain mass adoption,” he said. “There have been a number of sizeable price movements over the years which have typically gone unnoticed by anyone except those within the industry. “For example, in 2013 we saw the price drop 49.88 percent in just 14 days, which is a bigger drop than the one we have experienced over these last two weeks. By looking at Bitcoin’s historical price movements, we can all clearly see that price movements such as the most recent one this month, are nothing out of the ordinary for the Bitcoin industry.”

He makes a good point about mass adoption. Bitcoin is close to overtaking Mastercard in terms of the value transferred daily. That will be a pretty big landmark. A number of large retailers and tech companies have adopted it, along with leading sportsbooks, while institutions, hedge funds and state pension funds have all embraced crypto of late. There are reasons to be bullish, but in the short-term it seems extremely risky to use Bitcoin for sports wagering purposes.

On Thursday, its value stood at $4,388 at one point, and then by Friday it had fallen to $3,913. That sort of drop can massively erode your winning margins in the time it takes for a ball game to take place and for you to be paid out. If you want to bet in Bitcoin, it makes sense to place your bet immediately before the game and convert any winnings back into dollars as quickly as possible once the result is in. Bitcoin’s value should eventually start climbing back up, but right now nothing is certain and further declines are likely in the short-term.

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