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Bitcoin drops further

The bitcoin price has dropped further since yesterday. The price started at above US$15,000 and has dropped to below US$14,000 overnight according to Coindesk, it’s currently sitting at US $13,807.

Traders appear to have lost confidence in the ability of the cryptocurrency to keep rising, with the price down heavily since its high of around US$19,500 only a couple of weeks ago.

There has been a lot of analysis that bitcoin simply can’t sustain the amount of transactions that are currently waiting to be fulfilled, leading to long wait times and higher transaction fees.

It seems hard to believe that the price has fallen by more than a quarter, even though apparently large numbers of people are waiting to sign up to a cryptocurrency transaction service.

‘Investors’ who bought bitcoin just a year ago are sitting pretty on gains of around 1,300%. Investors who bought years ago could be millionaires by now, but that rise isn’t going to happen again. Bitcoin would need to become a globally-used currency in everyday life, which seems difficult with some of its flaws.

There’s just as much chance that bitcoin could continue its slow decline, back to below US$10,000. However, that doesn’t mean that bitcoin won’t have exciting days too sometimes. Volatility could still make bitcoin an exciting option for traders if the coin goes up by over US$1,000 in one day.

I’d rather invest in exciting tech shares like Altium Limited (ASX: ALU), MNF Group Ltd (ASX: MNF) or even speculative Fastbrick Robotics Ltd (ASX: FBR) than buy bitcoin today. At least most tech companies are generating actual revenue, profits and paying dividends. There is nothing to support bitcoin’s meteoric rise except for the hype and speculative buying.

Cryptocurrency traders and genuine users will probably find better traction with some of the other cryptocurrencies which reportedly have better technology, such as bitcoin cash and Ripple.

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Motley Fool contributor Tristan Harrison owns shares of Altium. The Motley Fool Australia owns shares of and has recommended MNF Group Limited. The Motley Fool Australia owns shares of Altium. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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