This Bitcoin Crash Is Barely a Correction

Cryptocurrency investors were in a rude awakening on Wednesday. Most cryptocurrencies traded significantly lower led by Bitcoin (CRYPTO: BTC) It fell nearly 5% overnight as it dropped to just over $58,000.

It’s been more than a week since bitcoin reached all-time highs, passing its springtime peak. You’ll see concerns on social media and financial journalists calling this a correction or even a more dramatic crash, but can we frame this in a longer shot? You have to go back nearly two weeks to find the last time bitcoin traded as low as it was on Wednesday, but no growth investment just going up in value.

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It’s a matter of time

Bitcoin has certainly been loosening up lately. By the time the market opening bell rang – using only that as a baseline since cryptocurrency trading around the clock – Bitcoin had shed 12% of its value over the past week. Take a longer look and the math will get a lot kinder. Bitcoin is up 37% over the past 30 days, up 359% over the past month.

Surely, the naysayer could pick up the Bitcoin high in mid-April. The world’s most valuable cryptocurrency will continue to cross the high water mark early last week, but is now trading below that starting point. This should not be a deal breaker. Many of the factors that have pushed Bitcoin north – which has moved sharply upwards in four of the past five months – are still in play.

Many people attributed the all-time high in Bitcoin last week to the arrival of the long-awaited first official Bitcoin ETF. There are some shortcomings for ProShares Bitcoin Strategy ETF (NYSEMKT: BITO)But it is already paving the way for other exchange-traded vehicles that use futures to ride the rise and fall of bitcoin.

It won’t end there. It is only a matter of time before Bitcoin spot funds – ETFs that already own the base currency – clear regulatory hurdles. In the meantime, we’re seeing more financial services institutions and leading fintech apps legitimizing cryptocurrency by announcing Bitcoin platform incubation initiatives.

There are legitimate concerns about Bitcoin itself. The energy costs of mining and transaction processing are showing signs of diminishing, but they are still significant. Bitcoin is also the largest class of cryptocurrency, but not necessarily the most practical in terms of applications in the blockchain food chain. However, with a market capitalization of $1.1 trillion – more than the 30 largest classes combined – this will continue to be the crypto gold standard.

We are still early in the revolution. One of the bright spots in Robinhood Markets(NASDAQ: HOOD) The nearly quarterly report released on Tuesday afternoon was crypto activity. Cryptocurrency revenue increased 860% for the third quarter when its performance in the previous year was determined. It was a big sequential pullback from the booming second quarter, but the yearly gains are impressive for a platform that only offers seven types of cryptocurrency without a crypto wallet platform. Cryptocurrency digital wallet is being Coming to Robinhood Markets, this is just another way to validate Bitcoin in the investment community.

Volatility will come with the area. Bears will celebrate every step back as the end of the crypto craze, even if Bitcoin takes a few steps before taking a break. With a strong performance in cryptocurrencies in the last quarter of the year, and with Bitcoin itself spreading, it is hard to describe this as a correction, a crash, and much less the end of the revolution.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of the Motley Fool Premium Consulting Service. We are diverse! Asking about an investment thesis — even if it’s our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.