The green line below shows a ~25% drop in the price of bitcoin this month.
(From $25,016 to today’s close around $20,116)
The red line is todays ~5% drop
(from $21,008 to $20,116)
But there is some good news.
If you watch bitcoin prices you will notice it is often like a downward staircase, and the down parts occur overnight. The fact that today’s drop occurred during the day is a silver lining.
Basically investors all over the world are concerned their country’s fiat currency will collapse. So they buy bitcoin. From there it works like musical chairs. Whichever country’s currency gets in trouble first, well, those people need money for food and rent first, so naturally, they withdraw first. If China or India or Sri Lanka run into trouble first, they withdraw first.
What usually happens:
- American currency is strong so Americans still have dollars to invest all day long. bitcoin stays strong and seldom falls during the day here.
- Then in Asia etc. as their fiat currencies weaken, Asians withdraw money.
Often it is kind of like a one-way ATM.
Americans put money in. People in weak-currency economies take money out. Today’s 1-day 5% drop means that American investors are tired of being used like a charity, tired of propping up bitcoin to protect people in weak-currency countries.
It is about time. I only hope more of my fellow Americans learn the lesson sooner.