The price of one Bitcoin is now hovering around $6,400. That is more than 50% drop than it was in 2017 and 66% plunge from the all-time high. In late December, Bitcoin hit just under $20,000 but facing huge drop. The bubble for crypto currencies may have burst in 2018.
Other crypto currencies such as Ethereum, XRP (aka Ripple) and Litecoin, have suffered similar drop in the past couple of months.
Legendary investors Warren Buffett and Charlie Munger of Berkshire Hathaway have advised investors to be little cautious about any trading related to these crypto currencies.
Recently Buffett told CNBC in an interview in early May. Bitcoin was “probably rat poison squared” while Munger said at the Berkshire shareholder meeting that the thought of owning crypto currencies was “just dementia.”
Still people like Winklevoss, believe that crypto currency is Gold 2.0. Despite of its fall, they are hoping that eventually, crypto currency will manage to bounce back. More people are investing in blockchain technology as it has potential to change the way how people pay for things in the future.
“The market did go up a little too much last year and people felt it was easy to make money. Investors weren’t separating the good from the bad,” said Ben Marks, CEO and founder of Blocktrade Capital, a firm that trades crypto currencies. “But Bitcoin is definitely here to stay.”
Crypto currencies took the market like a storm. Tons of public trade companies tried to latch onto the crypto trend.
To make matter worse, some companies began selling digital tokens to raise money.
Eastman Kodak (KODK) — yes, the camera and film company — created its own KodakCoin. There’s even a PotCoin for the legal marijuana and cannabis industry. Some of these initial coin offerings are legitimate but there is also lots of scam around it. The SEC created fake ICO called HoweyCoins to show how easy it is for investors to get duped.
The sheer number of crypto offering is very similar to internet retailers who got busted when the dot come bubble burst in 2000. Even Amazon shares were hit in the immediate wake of the technology because of concerns about its lack of profit and insane valuation. But Amazon eventually manage to survive and expand into more areas. It changed it business model and ask people to pay for subscriptions by offering them Prime memberships.
As Amazon started to thrive, other business like Walmart, Best Buy and Kroger adapted their business models as well, so they could take advantage of E-Commerce burst. That’s been great for consumers and retailers but it shows that having an E-commerce strategy isn’t special. It’s a vital part of any retail strategy. The same as for Bitcoin and the blockchain.
Blocktrade Capital’s Marks said that mainstream companies in the health care and entertainment industries could use blockchain digital ledgers to modernize their record keeping. Big banks are taking notice of the technology too. Goldman Sachs (GS) has said it will begin future trading in Bitcoin contracts. It could be game changing move for Bitcoin and other leading crypto currencies that rely on this technology.
Marks call involvement of big names like Goldman Sachs and others as “seal of approval”. Hopefully it would be good for the blockchain and its related crypto currencies in long run.