Letter #47. Bitcoin is $7,987. Why?

What caused the crash:

• FUD
Negative press has a big role to play in the way the market moves. When FUD starts flooding the media, the price usually takes a dive. Bitcoins is the new, unprecedented financial instrument and investors in this hitherto untested asset are quick to pull the trigger and get out. https://goo.gl/xZGx9g

• Government crackdown
As several countries, notably China and South Korea, target a crackdown. The Korean crackdown was a paper tiger and debunked by the countries highest authority, but bad news leaves its mark on such a speculative market. https://goo.gl/EeuW8U

Also, the Indian finance minister’s crypto regulation-related comments in a budget speech that accelerated losses. https://goo.gl/V8JWCV

• Correction?
Some experts think that a correction was bound to happen. https://goo.gl/EhCqWs
“The space was ripe for a correction after the craziness of the end of 2017,” Catalini, an assistant professor of technological innovation at the MIT Sloan School of Management said.