Bitcoin price CRASH: This is the reason cryptocurrency prices are PLUMMETING
Four out of five January’s between 2013 and 2017 saw a decline in Bitcoin prices.
EXCLUSIVE: Bitcoin's plummeting values are a stark contrast from the incredible spike that saw a slew of new investors pour their funds into virtual markets as it hit £12,201.24 ($17,035.60) last year, but what exactly went wrong?
Express.co.uk recently spoke with Ryan Derks, an investor with years of experience under his belt who now runs his own federally registered fund specialising in cryptocurrencies, who was eager to explain why Bitcoin is coming down from such a dramatic high.
He said: “What happened with Bitcoin over the last three to four months is simple physics where there was just so much buying and the price went up so fast, so high, so quickly that it was unsustainable, it had to come down.
“Very much like when you pull a guitar string too high, it doesn’t just go to back to neutral, it has to release all of that excess energy. So what we’re seeing right now, in my opinion, is a lot of that excess energy falling out.”
Bitcoin saw a rapid decline of 30.9 per cent in January 2015 - the month has a history of being bad for virtual investmsent.
Four out of five January’s between 2013 and 2017 saw a decline in Bitcoin prices.
However, the cryptocurrency owner claimed that the trend of the Bitcoin dropping in at the start of the year is “just coincidence”.
He continued: “You mentioned a history of Bitcoin struggling in January, in the world of trading we really like to look for patterns, maybe it’s just a human thing. I don’t really put much confidence in the January thing.
“I think it’s just coincidence that this is all just kind of crashing at the moment.”
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Mr Derks disclosed that he had warned his clients to “fully expect at least a 40 to 50 per cent drop every year or so” to avoid investor panic during times Bitcoin values plummet.
He went on: “The last four months the amount of energy that was put into Bitcoin was incredible and I read a headline it seems like every couple of weeks about the number of credit cards and short-term loans that are being associated to buying cryptocurrencies.
“So what’s going on right now doesn’t surprise me at all, one of the things I tell all of the clients that work with me is that they should fully expect at least a 40 to 50 per cent drop every year or so.”
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Mr Derks markets himself as the perfect first-step for investors looking to take the step into the virtual realm - he offers advice and puts funds into the most lucrative coins.
The virtual currency investor declared he had warned his clients that a drop in Bitcoin was about to take place before values went into free fall.
He continued: “So everybody was very much expecting this, I called everyone and let them know ‘hey this is going to happen’.
Bitcoin's plummeting values are a stark contrast from its incredible spike last year.
“We sold a little bit out to protect ourselves on the downside and it’s working out well so I’m not too concerned. It’s just a lot of excess energy that’s been put into buying Bitcoin and again natural markets do this.
“When any traditional asset goes up too fast it has to come back down. So right now we are testing to figure out where that number should have been and it looks like quite a lot of people are a bit nervous about this situation.”
Mr Derks is fully invested in cryptocurrencies like Bitcoin and believe they are “potentially the most disruptive piece of technology or software that has ever been written” thanks to the elusive nature that allows it to escape the clutches of governments.
Mr Derks declared he had warned his clients that a drop in Bitcoin was about to take place
He remarked: “I truly do believe that although right now we are seeing loads of crazy media headlines, that what is going on right now is potentially the most disruptive piece of technology or software if you will that has ever been written and we are just starting to see how this affecting the world.
“People in say the UK for example or here in America we are relatively first-world nations and we don’t necessarily see the value in a currency that can’t be controlled by governments.
“Countries like Venezuela are absolutely seeing the benefits of a currency or piece of technology that can act as a currency that is not influenced by any central government or central bank.”