Between Warren Buffett and South Korea, a Down Day for Bitcoin
Cryptocurrencies endure highs, lows, and ups and downs in between. Accordingly, bitcoin suffered an acute fall following some harsh words from billionaire entrepreneur Warren Buffett and some rather stressing news stemming from South Korea.
Bearish on Bitcoin
Buffett has never been a fan of cryptocurrency. In 2014, he labeled bitcoin as a “mirage,” and warned investors to stay away from it. Four years later, it appears his feelings haven’t changed.
“We don’t own any,” he explained while recently discussing the asset holdings of his company Berkshire Hathaway. “We’re not short any, we’ll never have a position in them. I get into enough trouble with the things I think I know something about. Why in the world should I take a long or short position in something I don’t know about?”
Buffett has explained that bitcoin’s extreme volatility makes it one of the world’s shakiest investments. He also made a very grave prediction, stating “In terms of cryptocurrencies, generally, I can say almost with certainty that they will come to a bad ending.”
Buffett Not Alone
Volatility is a topic that comes up often during crypto debates, and Buffett isn’t the only one who feels it’s a problem. SIO of absolute return strategies at SEI Investments Co. Jim Smigiel feels the consistent price changes prevent people from living normal lives.
Unlike other investments, people can check the value of their crypto through mobile functions and other applications whenever they choose. They tend to become obsessive, which isn’t good as the numbers change minute by minute, making investors emotionally vulnerable.
“With other speculative investments, like private equity and venture capital, you can’t check your phone every five minutes,” Smigiel notes. “Looking at something with such high volatility all the time is not conducive to an investor’s mental health.”
South Korea Is a Hard-Hitter
Ironically, Buffett’s claims aren’t what did the most damage to bitcoin’s value, though the price did fall approximately $200 USD early Wednesday afternoon following his prediction. The main attack came by way of South Korea, which announced it is in the process of preparing a bill that would reportedly ban trading on cryptocurrency exchanges operating within the nation’s borders.
Additionally, exchanges ranging from Bithumb and Coinone, quite popular in South Korea, were raided in the days prior to the announcement by law enforcement officials seeking evidence of tax evasion.
Some are claiming the report is overblown or untrue, but this didn’t stop the bitcoin price from falling by nearly percent. Following a recent eight percent dip, bitcoin is now again down by over 15 percent, and trading at just over $14,000 at press time.
A Light at the End of the Tunnel
The good news is that certain altcoins have managed to hold their ground, suggesting the crypto arena isn’t shaken to its core.
Currencies like Vibe, for example, experienced hikes of nearly 400 percent within a 24-hour period, trading as high as $2.34 on Wednesday afternoon. Vibe’s market cap is currently over $400 million per CoinMarketCap.com.
Will they be the exception to the rule in the coming days? We’ll have to wait and see.
Will bitcoin regain its footing in the coming days? Post your comments below.
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