Cryptocurrency is a very hot topic these days, as both Bitcoin and Ethereum have experienced massive increases in value recently, as the proof of concept for the two ideas has become more and more accepted by investors. However, that confidence appears to be waning as both Bitcoin and Ethereum have experienced significant decreases in value over the past week. That's not out of the ordinary for the always fluctuating cryptocurrency prices, but it will certainly have investors concerned about what is going on with their money.
Ethereum's Recent Decline in the Market.
In spite of someone's best efforts in Congress to promote cryptocurrency, both Bitcoin and Ethereum have declined in value. This man's efforts weren't quite enough to stop the bleeding:
‘Bitcoin Sign Guy’ Nets $16,000 As ‘Vitalik’ Advocates Ethereum In Congress https://t.co/JCX3tV2e6i pic.twitter.com/MdUpJdDZoi
— WuWei (@WuWeiTaoist) July 15, 2017
The current price of Ethereum is approximately $192 currently, but on June 20th, the price was at approximately $350. That means the price has nearly been cut in half in less than a month, which exhibits the extreme volatility of the cryptocurrency market.
And the volatility isn't limited to just Ethereum. In the past 7 days, the price of Bitcoin has dropped from approximately $2500 to about $2200, a $300 drop in just 7 days.
Investors who can stomach these losses will likely have to be ready for more volatility, as the chart for Bitcoin is essentially a straight line going upward right now.
Risk Evaluation?
Even though Bitcoin dropped $300 in 7 days, that's not close to the Market Correction experienced by Ethereum, which dropped nearly 50% in value in the past month.
To me, that means the risk of investing in an idea like Ethereum has been significantly reduced, and there isn't a better time to buy than right now. As of now, I could buy 11 ethereum units instead of one Bitcoin, and the market correction on Ethereum have been more severe.
However, only those willing to accept some extreme risk should even consider investing in either of these cryptocurrencies.
Their price charts are both extremely volatile, and there's no clear sign that Bitcoin or Ethereum are completely safe. Neither currencies are guaranteed by the government, so it would be a mistake to think that an investment in either of these two ideas are safe. In an earlier article, I wrote about money management in both spending and saving. In this case, I can't advise investing in either of these currencies unless you have a large risk appetite or are very young. It's especially difficult to have confidence, especially when we are likely in a bubble right now. However, if I had to pick one, I would definitely choose ethereum over Bitcoin, as the upside potential at this point in time is much higher.
