Investors in bitcoin are used to a bumpy ride, and this weekend it was like riding a bucking bronco in a rodeo during an earthquake. Friday bitcoin hit an all-time high of nearly $42,000, but if owners of bitcoin spent the night celebrating they were hit with a new reality Monday. It had plunged 20% to $31,000. Because of that free fall, analysts now consider it a bear market.
James Putra, the VP of product strategy for TradeStation Crypto said what happened over the weekend was ultimately a good thing. “It’s scary when the price of bitcoin just goes straight up, but this pullback was needed.”
Other big time financial strategists saw the writing on the wall too. One with Bank of American called the dramatic surge of bitcoin the “mother of all bubbles.”
Bitcoin has dominated headlines recently, as it first hit the $20,000 level in mid-December and then rocketed to $30,00, before topping out at $42,000.
In sheer market value, the tank job over the weekend was staggering. Bitcoin and other digital currencies lost over $200 billion on the cryptocurrency market. On Monday the cryptocurrency value on the market was at $880 billion, down from the $1.08 trillion it hit Friday.
That’s a massive market correction that many felt was needed.
Others are still excited about where bitcoin is going. Jean Chu, founder of a cryptocurrency venture capital firm called Kenetic Capital told CNBC that now is the time for investors to buy bitcoin. “This short term correction is both natural and needed, and is a great entry point for long-term investors as we quickly reach $50k this quarter and $100k by year’s end,” Chu told CNBC.