Bitcoin’s Price Plunges Amid Broad Cryptocurrency Sell-Off

Every major cryptocurrency suffered double-digit losses in the last 24 hours.

By TIMOTHY B. LEE

After rocketing to a high above $19,500 last Sunday, bitcoin’s price has been steadily dropping this week. Those losses accelerated overnight, with the cryptocurrency falling below $13,000.

Bitcoin’s losses come amid a broad cryptocurrency selloff. As of Friday morning, every major cryptocurrency was posting double-digit 24-hour losses. Ethereum is down 28 percent over the last 24 hours, Bitcoin Cash is down 37 percent, and Litecoin is down 32 percent.

To be fair, all of these currencies—like bitcoin—have seen massive gains in recent weeks. They’re all well above their value at the start of December, to say nothing of values earlier in the year.

But the broad-based blockchain slide comes as a growing chorus of experts warn that cryptocurrency valuations could be an unsustainable bubble. Yesterday, a beverage company called the Long Island Iced Tea Company renamed itself “Long Blockchain” and was rewarded somewhat hysterically with a nearly 3-fold increase in its stock price. This story, and others like it, has convinced some observers that we’re seeing a repeat of the 1990s technology boom.

One factor weighing on bitcoin in particular is the network’s skyrocketing transaction fees. Two weeks ago, the daily average fee to send a bitcoin transaction hit an all-time high of $26. This week, the network left that record in the dust, with the average fee on Thursday reaching more than $50.

Of course, bubble warnings have been common throughout the cryptocurrency boom of the last year, and bitcoin has had several double-digit crashes before. In each of these past cases, bitcoin recovered its value and zoomed to new heights. The big question is whether this time is different.

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