The Bitcoin Roller Coaster

If you’re one of those who bought bitcoin circa 2013, congratulations!!! You must be elated on your overnight millionaire status and are basking in your newly acquired wealth. But if you belong to the category of people who jumped on the trend after the sharp rise in 2020/2021, you might need a prayer or two to recover from the current tragedy as the cryptocurrency continually takes a nosedive.

Prior to the pandemic, the value of Bitcoin had been fairly stable since June 2019 after the bubble and burst of 2017 until it rose drastically from $10, 764 in September 2020 to the whooping sum of $58,734 in March 2021. This increase can be associated with investors from large scale institutions embracing the use of cryptocurrencies. Retails investors are not exempted as more individuals jumped on the bandwagon and also started investing more in the currency. Since then, it has been a roller coaster ride as speculations continue to drive its volatility.

Photo by Milan Csizmadia on Unsplash
Photo by Milan Csizmadia on Unsplash

The controversy around bitcoin and other cryptocurrencies is far from over. With no clear underlying asset backing it up compared to other forms of securities, there are no concrete bases for the rise and fall of the currency…well except for the point stated earlier and tweets from influential people like Elon Musk. In February 2021, Elon tweeted that his company had a crypto holding to the tune of $1.5 billion and that they will start accepting bitcoin for Tesla payment. Three months later, he announced that Tesla will no longer be accepting payments in Bitcoin. Tweets from influential people are just one of the many ways cryptocurrencies have been manipulated. Some governments across the world have been banning or restricting its usage. In February, the Central Bank of Nigeria banned crypto based transactions and went as far as restricting individual accounts that have been linked to crypto trading. Turkey followed suit by banning crypto transactions in April stating that the level of anonymity associated with it may result in irrecoverable losses. These government policies further contribute the volatility of cryptocurrencies. Their hesitations, though valid, will not change the fact that cryptocurrencies are here to stay and the earlier they find a way to go about its regulation, the higher the chances of stabilizing it.

Despite this kick back, people are still making use of crypto has been beneficial in several instances. It was an instrumental medium of exchange during the #ENDSARS protests in Nigeria in October 2020 when accounts of active protest members were blocked. People started donating in the form of Bitcoin to fund the protests further. In some other instances where multinationals were having issues remitting money to their parent companies, crypto came in handy in facilitating such remittances.

As the world continues to navigate the speculations associated with cryptocurrencies, it is important to note some of these points:

  • “Buy the dip” has been trending but may not be the best decision to make at this point in time. Crypto traders have been lamenting about taking major losses on several social media platforms. It is unclear how long this trend will last but it is best to wait it out before dabbling into cryptocurrencies again.

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