Here are some examples of financial news headlines from the last few days:
Bitcoin finally hits $10,000! — The Economist, Nov. 28th, 2017
Bitcoin surpasses the $10,000 milestone! — CNBC, Nov. 28th, 2017
BITCOIN SOARS ABOVE $11,000! — The Guardian, Nov. 29th, 2017
News outlets haven’t even had 24 hours to let the “10K” news simmer and it already climbed to $11,500. By the time they published the “11K” piece, it already dropped back to $9,000. Then, as soon as they entered the last word on their “Bitcoin is crashing!” article, it’s back at $11,000 per BTC.
Amazing! But this is not unprecedented.
We’ve seen this before, back in 2013, a media frenzy when Bitcoin was approaching $1,000 that fueled that year’s bubble. In January of that year, one bitcoin was trading at around $15.00, rocketed to $266 by April, and then crashed back to $50 really quick. By November, it had already broken $1,000, peaking at $1,242 on Mt.Gox. That’s an almost 100-fold increase in 11 months, an order of magnitude larger than this year’s (2017) 10-fold run up.
Funny thing is, the charts then are almost identical to the ones today, and news articles look exactly the same. Just add one zero.
The media gobbles this up because people are fascinated by this stuff. Stories of people finding 5000 BTC in an old hard drive that they bought for $25 in 2009, a man throwing away 7500 BTC by accident and scouring a landfill to try and find it, a man buying pizzas for 10,000 BTC — It’s the sizzle to the steak and it sells.
The Other Side
People love it when things go up, but what goes up must come down, and Bitcoin is not immune to this. History shows three major “Bitcoin Bubbles”, and a LOT of volatility in between. Swings of 20–30% in one day are not uncommon in the Bitcoin world, but to most people this can be quite terrifying. For example, in the same day when Bitcoin broke $11,500 a couple of days ago, Bitcoin crashed back to $9,600, and lost 20% of its value overnight.
It isn’t just that, there are more. There’s that time it crashed from $260 to $50. Bitcoin was declared dead.
Read more: Decentralize Today