BITCOIN CRASHES…AGAIN

The heavily hyped cryptocurrency Bitcoin crashed on January 10th and 11th, following a precipitous climb during the first week of the year. Bitcoin lost more than ¼ of its value, from its high of $41,448 on January 10 to its intra-day low of $30,100 on January 11.

Speculators had rushed into Bitcoin in recent months, some anticipating the cryptocurrency would serve as a hedge against debasement of fiat currencies and rising inflation.

But the fact is Bitcoin has no intrinsic value, nor does it have an established history of widespread acceptance as a store of value. Moreover, Bitcoin has no fundamental metrics upon which investors can value the cyber-currency. It is worth no more than what other speculators think it’s worth at any moment.

That explains why Bitcoin has repeatedly crashed since its launch in 2009. In March, when the seriousness of the COVID-19 pandemic was becoming evident, Bitcoin plunged nearly 60 percent. In 2017, Bitcoin fell to $3,000 from a high of $20,000 and in 2011, Bitcoin fell to $2 from $29.

Gains in Bitcoin may be tantalizing to investors, but the cryptocurrency’s off-the-charts volatility can quickly wipe out a lifetime of savings. More than a quarter-million traders bailed out amid panic selling on January 10 and 11, according to crypto analytics firm Bybt.com.Britain’s Financial Conduct Authority (FCA) regulatory agency has issued a stern warning to investors: “If you invest in crypto-assets, you should be prepared to lose all your money.”