The Bitcoin price had another volatile week that included reaching an all-time high and a withering tweetstorm from famed investor Mark Cuban.
On Tuesday morning (Eastern Time), the price of Bitcoin soared to an all-time high of $2,967.48 on the CoinDesk Bitcoin Index. That eclipsed the previous all-time high of $2,791.69 set on May 25.
At that point, the year-to-date gain in the Bitcoin price was a stunning 206.49%. The Standard & Poor's 500 Index, by comparison, is up 8.68% in 2017.
As often happens with Bitcoin, the price didn't stick around its all-time high for long…
Why the Bitcoin Price Fell After Peaking at $2,967
A couple of hours after Bitcoin hit the all-time high, Cuban let loose this tweet:
I think it's in a bubble. I just don't know when or how much it corrects. When everyone is bragging about how easy they are making $=bubble https://t.co/hTrV5DeWNd
— Mark Cuban (@mcuban) June 6, 2017
The bubble talk sent the price of Bitcoin into a tailspin. The Bitcoin price fell to $2,742.33 before rebounding into Wednesday. But the slide resumed by midday Wednesday, sending the Bitcoin price as low as $2,625.08. It was a loss of 11.54% in little more than a day.
By midday Friday (today), the Bitcoin price had recovered to the $2,860 level – just $100 below the all-time high. For the week, Bitcoin is up 18.26%.
But investors shouldn't let the unusually volatile Bitcoin price action this week distract them from the bigger picture…
Why the Bitcoin Price Has Been Rising So Quickly in 2017
After this week's ups and downs, the price of Bitcoin is still up 195% on the year. And it's up nearly $1,200 – a gain of 69% – in the past four weeks alone.
That's because the Bitcoin price has several powerful catalysts pushing it.
That includes the legalization of Bitcoin in Japan, a policy reversal in Russia from anti-cryptocurrency to pro-cryptocurrency, the trend of initial coin offerings (which must be purchased with Bitcoin or Ethereum), and more money coming into Bitcoin from institutional investors.
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These factors were at play as the price of Bitcoin soared earlier in the week.
Pullbacks have occurred on negative news or profit-taking, but each time the price of Bitcoin has bounced back to reach new highs. This week's run to a new all-time high was preceded by a 31% drop.
This is why long-term Bitcoin investors haven't panicked (or gotten overly excited) in the past few months as the price of Bitcoin has rocketed and sunk. Over the long term, the Bitcoin value is bound to increase as demand keeps rising and the supply of newly mined coins shrinks.
Now here's what investors can expect from Bitcoin next…
Where the Price of Bitcoin Is Headed Now
About the Author
David Zeiler, Associate Editor for Money Morning at Money Map Press, has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.
Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.
Dave has a BA in English and Mass Communications from Loyola University Maryland.