Bitcoin’s dollar value fell by 17% on Tuesday, its sharpest fall in a month, as investors probably grew wary of an upward price chart that looked like an eerie succession of blips, and began booking profits. This fabled cryptocurrency dropped to $45,000 apiece, down about a fifth from its lifetime high of $58,354 that it hit on Sunday. A day earlier, even Elon Musk, Tesla chief and recent Bitcoin champion, had said the token’s price seemed “high”. Tuesday’s slide had a ripple-effect on the entire crypto space, with Etherium matching its losses.
The volatility we often witness can be ascribed to the nature of crypto units. As tokens of exchange, they have no intrinsic value whatsoever, and serve largely as speculative targets in a world flush with fiat money, thanks to history’s biggest ever cash-creation binge, brought on by the covid crisis. The suffix ‘currency’ is thus a misnomer. Bitcoin isn’t useful for shopping (except for illegal things, presumably). But then, the same could be said of gold, which has been a long-serving unit of exchange, and dumped as the US dollar’s back-up only half a century ago, and remains sought after. As with gold, who can say what price is right?