What would happen if President Donald Trump made comments about something through one of his tweets? In the case of Bitcoin, Trump made some negative comments and the price of the cryptocurrency went down. Bitcoin fell by about 20% late last week and briefly dipped under the $10,000 mark. What was it that Trump said, and were his comments the main reason for the Bitcoin price drop or was it simply normal Bitcoin price volatility?
Trump tweeted late last week that he is not a fan of cryptocurrencies. “I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity.”
The comments by Trump sent the price of Bitcoin down and it also sent the price of Ethereum and Litecoin down. All three cryptocurrencies fell by about 20%. While Trump’s comments were definitely negative toward Bitcoin, many in his administration have a favorable view of cryptocurrencies, and some people believe that after the initial shock wears off, the price of Bitcoin will go back up.
Trump was also very critical of Facebook and their plan to develop the Libra coin. His comments could force Facebook to rethink their plans. Facebook will be facing two U.S. congressional hearings this week on their plans for Libra.
Bitcoin Price Volatility
It doesn’t take much for the price of Bitcoin to move. A strong sneeze is more than enough for the price to move one way or another. Bitcoin has had a big rally this year with the price more than doubling. The question that must be answered for serious investors in Bitcoin is what is causing all of the volatility. The Chief executive of Binance, Changpeng "CZ" Zhao, said that volatility could continue.
"We have not seen institutions growing faster,” Zhao said to the media, "What we’ve seen is a pickup in both places. The number of institutions coming into this industry has not increased that tremendously in 2019 yet."
Bitcoin had an amazing run in 2017 when the price hit nearly $20,000 and some people believe another big run is coming. The difference this time is that the price of Bitcoin seems to be driven by a multitude of factors, while in 2017 it was driven by the fear of people missing out. The big bull run of 2017 didn’t have a lot of big companies behind it, but this time around there are some marquee companies like AT&T, Apple, Microsoft and others who have already implemented Bitcoin payment methods into their businesses. It also helps that Fidelity Investments is now involved with Bitcoin trading.
Regardless of what causes Bitcoin volatility we know that it is not going away anytime soon. There will continue to be big price swings in the coming months. It would not be surprising to see Bitcoin fall back to the $8,000 mark, but it would also not be a shock to see the price once again approach the $20,000 mark. Would you really be surprised if both of those things happened before the end of the year?
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