In 2017, the price of Bitcoin shot up more than 1,200% as the cryptocurrency ignited a frenzy of buyers that thought the price would only keep on rising. And for a while it seemed like that, but that hasn’t been the case this year.
Year-to-date, Bitcoin has lost more than half of its value and at $6,500, it has not been this low since November, and nowhere near the more than $19,000 that it peaked at in December.
The big problem for crypto traders is that companies like Facebook, Inc (NASDAQ:FB) and Alphabet Inc (NASADAQ:GOOG) have banned advertisements relating to Bitcoin. Even banks have disallowed cryptocurrency purchases from being made on credit card, and so not only are there limited ways for people to learn about coin offerings, there’s also fewer ways to purchase them.
Cryptocurrency exchanges have also been hacked, with the most recent being South Korea’s Coinrail. Last week, the exchange announced that 30% of its virtual currency had been stolen by hackers, and as a result had to suspend trading.
While it wasn’t specifically Bitcoin that was hacked, it underscores another danger when it comes to digital currencies. Buying cryptocurrencies is high risk not only because of their wildly fluctuating prices, but also because there’s less traceability than you would see with a normal bank transaction, and that makes it easier for funds to be lost or stolen.
Bitcoin serves as a good reminder as to why real investing involves looking at fundamental analysis and considers factors beyond just prices and charts.
