Happy Bitcoin 12,000 Day.
Remember the first Bitcoin 12,000 Day? I sure do. It was two weeks ago, in the midst of that golden age of bitcoin in which it was adding a couple of thousand dollars pretty much every day. Bitcoin 12,000 came on the same day as Bitcoin 13,000 and Bitcoin 14,000, two days after Bitcoin 11,000, and one day before Bitcoins 15,000 and 16,000. Those were good times. We talked about getting hats printed, “Bitcoin 25,000 Before Dow 25,000.” It seemed obvious. Everyone wanted in. Paul Krugman’s barber’s brother-in-law put everything in bitcoin. Bitcoin’s essential characteristic, for the last month or so, was that it went up.
Now it’s going down! Bitcoin fell through $13,000, rallied back above $14,000 this morning, and then resumed a plunge to below $12,000 as of just after 9 a.m. Happy Bitcoin Various Prices In Various Directions Day, I guess.
Why did it drop? Search me. The fact that bitcoin’s drop came just as bitcoin futures came online at regulated exchanges is a little suggestive: Maybe all those smart-money hedge funds who were clamoring to short bitcoin actually did it, and it paid off. That seems a little too neat to me: Shorting a volatile soaring asset might be smart, but it is also terrifying, and it’s hard to imagine institutions piling in early to do it in size. Or maybe people who bought bitcoin at $2 or $200 or $2,000 or $12,000 decided to take profits while the getting was good, and interpreted the last couple of weeks’ worth of non-stop white-hot bitcoin coverage as about as good as things were going to get. “A frenzied demand for coins with limited supply has now led to unsophisticated investors holding the bag at the top,” Oanda Corp. head trader Asia Stephen Innes told Bloomberg News.