The Rise and Fall of Bitcoin.
                     THE RISE AND 
FALL OF BITCOIN
How have crypto-currencies fared in 
2018?
• Cryptocurrencies have witnessed a massive fall in 
prices since they hit a peak in December last year. 
• Bitcoin, by far the most popular cryptocurrency 
on the planet, is currently trading below $7,000 
as compared to its peak price of over $19,000 a 
loss of two-thirds of its value from the peak.
Source: www.thehindu.com
Fall in the price
• Other cryptocurrencies have witnessed a similar 
steep fall in their prices over the last quarter as 
investors have pulled out of the market. 
• Remarkably, the present crash follows a year of 
extraordinary returns when cryptocurrencies saw 
their prices rise multifold owing to investors’ 
expectations over their prospects.
Source: www.thehindu.com
Rise of bitcoin
• Many have viewed the rise of bitcoin and other 
cryptocurrencies as a massive bubble like the 
dotcom and other bubbles in history which saw 
asset prices increase without any fundamental 
reason.
Source: www.thehindu.com
What’s behind the crash?
•  Cryptocurrency enthusiasts, on the other hand, 
view the crash as just another healthy correction 
that is part of any asset’s rise over the long run.
Source: www.thehindu.com
Opportunity to buy at cheap price
• In fact, they point to similar steep crashes in the 
price of cryptocurrencies in the past that turned 
out to be short-lived. 
• Thus, they see the present crash as a good chance 
to buy cryptocurrencies cheaply before their 
prices begin to rise again.
Source: www.thehindu.com
What’s the future of 
cryptocurrencies?
• Technically, cryptocurrencies are still trapped in a 
downtrend which began in mid-December amid 
increasing fears of a regulatory crackdown by 
governments. 
• Though unlikely, this downtrend may come to an 
end if investor sentiments suddenly change in 
favour of cryptocurrencies once again.
Source: www.thehindu.com
Poor fundamentals
• Many believe that the biggest hurdle facing 
cryptocurrencies is their poor fundamentals. 
• None of the cryptocurrencies, for instance, has 
yet proved its fundamental value as a currency 
that will be readily accepted by a huge population 
as a medium of exchange.
Source: www.thehindu.com
Threat to Sovereignty
• cryptocurrencies, in essence, continue to be 
viewed as a gamble by most. 
• Governments across the world have also not 
been too keen on allowing cryptocurrencies to be 
used as alternative money as they view private 
currencies as a threat to their sovereignty.
Source: www.thehindu.com
India has banned Cryptocurrencies 
• The Reserve Bank of India, for instance, imposed 
a ban last week preventing banks from dealing 
with cryptocurrencies. 
• The present crash has only managed to bring 
these risks to the fore.
Source: www.thehindu.com
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