To say bitcoin ins volatile would be an understatement. It seems to either be surging or crashing with little signs of overall stability. This is the reason that Valve recently stopped accepting bitcoin as a method of payment. Last week was a rough one for those into bitcoin, as the cryptocurrency took a beating with as much as a 30% decline in value at one point.
The good news if you have lots of bitcoin is that today the digital currency is rallying and has risen by around 15% to recover about half the losses sustained last week. At its lowest point on Friday of last week, bitcoin was worth $11,159.93. Earlier today, bitcoin was trading at $15,639.
"The latest price move shows bitcoin is still a speculative investment. There is enormous amount of volatility there," said Kristina Hooper, chief global market strategist with Invesco in New York.
The $15,639 value of bitcoin is still a long way form the cryptocurrency at its high point, which came on December 17 when it was trading at $19,666. That is a gigantic gain from the less than $1,000 price it was trading at back in early 2017. As of this writing, Coindesk shows the price of bitcoin at $15,900.
"There is no right current price which would reflect the right current valuation," said Andrei Popescu, Singapore-based co-founder of COSS. "Taking profit is right, while buying into a long term projection is also right. You don’t have to be right in this market, just less wrong than the rest," Popescu said.
While Goldman Sachs is reportedly set to launch a cryptocurrency desk early next year, other major financial institutions are less excited about bitcoin. A research paper published Friday by analysts at Citi said in part, "We therefore think that bitcoin is a product that is unable to fulfill the basic functions it is meant to fulfill. We therefore think it is likely a bubble, that will eventually fade, as other cryptocurrencies will take over."
Some banks and investment firms have gone so far as to warn against investment in cryptocurrencies. However, the lure of easy money has many people continuing to invest in and mine cryptocurrency.