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May 13, 2022 6 min read

A Rough Week for Bitcoin As Prices Crash Below $30k

Wiser! Essay: Is now the time to buy, sell or hodl your Bitcoin? The price has been on a downward trajectory since late November, then it hit its all time high. Now it has less than half the value. What to do? That is the question.


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Bitcoin collapse
Bitcoin's price collapsed 32% in a week

Bitcoin's decline mimics the collapse in tech stocks

Back Story:  Six months ago, the price for a Bitcoin hit an all time high of $68k.

As I put this issue of Wiser! to bed, the price has more than halved in value and is down to $28k.

Time to be a Bear and cut and run, selling for whatever price you can get? Or be a Bull and  "buy the dip", the crypto phrase for buying when Bitcoin's volatility has dragged the price down.

Or is it simply a time to Hodl, staying calm and hanging on to what you've got? ("hodl" is the deliberate misspelling of hold, unique to Bitcoiners who hang on in there for the long term).

Not Just Bitcoin:  In isolation, it would seem that the bottom has (finally) fallen out of the crypto market. Bitcoin is the largest crypto by far, twice as big as the next largest digital currency in Ethereum.

But when Bitcoin sneezes the rest of crypto catches a cold. Bitcoin down 28% on the week compared to 38% for Ethereum. Meanwhile the stablecoins are doing what they are supposed to do and staying roughly flat, ignoring the volatility around them.

Except for Luna. A brutal lesson in the volatility and risk of cryptocurrency has been learnt this week. The stablecoin, Luna, was worth a $121 last month. Today it is worth only a few cents.

But it's not just Bitcoin and the crypto markets that are having a rough ride. Tech stocks are down too, which is beautifully illustrated in this video from Bloomberg.

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Why?:  A series of disparate events have come together at the same time. You’ve got rising interest rates combined with rising inflation, the war in Ukraine creates economic uncertainty. There's increased talk of regulation for digital assets and the tech sector.

Then you’ve got Covid lockdowns in China that are severly impacting supply chain, that was still in recovery from the pandemic. Plus there's some inflicted pain in the tech economy, like Apple’s anti-tracking changes in iOS.

MetaFacebook forecast that Apple's anti-tracking will cost them $10 billion in lost revenue this year!

Nayib Bukele

Read the full story.

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