Investors are warned about the volatility of cryptocurrencies, this quick recovery is proof of how quick it can change.
Bitcoin's price dropped 25 percent last week, this triggered a massive sell-off that lowered Bitcoin's worth to below $12,000. Bitcoin recovered but not to record high prices.
Price Correction
Bitcoin investors are notorious for the constant checking of prices, waiting for the right moment to seize on a buying period. Those that were checking today after last week's fall were surprised to see that its value rose 10 percent.
Bitcoin is currently worth just above $16,000, according to Coinbase. Falling Bitcoin prices were predicted after what seemed like an endless climb. The correction, however, came sooner than expected. It dropped almost $2,000 in one hour during last week's fall.
Other cryptocurrencies such as Bitcoin Cash, Ethereum, and Litecoin also bounced back after a rough end of the week. Just like Bitcoin, all are trading below the record highs from the beginning of last week.
Just last week before the drop in prices, Singapore's central bank warned the public against investing in Bitcoin. The Money Authority of Singapore said that prices were being driven by "speculation" and foresaw the sudden steep drop in prices.
More Bubbles
Bitcoin's volatile nature lends itself to a cycles of steep drops and soaring highs.
Cryptocurrency entrepreneur Julian Hosp predicts that there will be another high point in the bitcoin's value. Hosp says that he could see the cryptocurrency hitting the $60,000 mark. In the same breath he declares that it will also drop to $5,000.
Highlighting the volatility of bitcoin, he added that he's not sure which one would come first.
Hosp also alluded to another tech bubble that burst and left investors wondering where to go next — the dot-com bubble.
He also described the consolidation of the cryptomarket. There are more than 1,000 cryptocurrencies, Hosp says the smaller coins will go away. Hosp says that bitcoin will be used as gold and questions its everyday use. People will be able to store wealth in bitcoin but not be able to make everyday purchases with it.
Without any protections, it's difficult to see the value in storing wealth in bitcoin. Constant changes in value make it a dangerous investment. Many central banks around the world question investing in it, and warn about its dangers. China is one of the countries that has banned bitcoin all together.
