Bitcoin, Ethereum, Litecoin and other major cryptocurrencies have been on a wild ride this year, and over the past 10 days the volatility that we have witnessed in the marketplace has been absolutely breathtaking. On December 17th, Bitcoin shot above $19,800 for a brief moment before it started plummeting dramatically. At one point the price of Bitcoin dipped below $11,000, which represented close to a 45 percent decline from the record high that it had hit just five days earlier. And Bitcoin was far from alone – virtually every other major cryptocurrency was also down between 25 and 50 percent during that five day period. But now almost all of them are bouncing back, and at this moment the price of Bitcoin is $14,219.99.
So where do things go from here?
There are many that believe that in the short-term the price of Bitcoin will fall back toward the actual cost of production. It has been estimated that the cost to produce a new Bitcoin is currently between three and four thousand dollars, and with the price of Bitcoin so high there is a tremendous incentive for Bitcoin miners to produce as many as possible right now.
But there are others that are convinced that Bitcoin could eventually go to zero…
Morgan Stanley analyst James Faucette and his team sent a research note to clients a few days ago suggesting that the real value of bitcoin might be … $0.
That’s zero dollars. (Bitcoin stood at around $14,400 at the time of writing.)
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