Bitcoin got hammered over the weekend in a fall that sparked fears of another “crypto winter,” when the crypto king crashed for months beginning in December 2017.
December 2021, so far, hasn’t been much kinder to bitcoin. As CNBC reports, on Friday morning, December 3, bitcoin was trading around $57,000 per coin. That’s below its all-time high of around $69,000 in early November, but still respectable. But by Saturday, December 4, bitcoin had dropped as much as 17% to trade at $43,000 per coin.
By Sunday, December 5, bitcoin did recover from some of its losses, trading at a high of around $49,000 for some time, but as of the time of this writing, bitcoin is down again, over 3% this time, to just over $47,500 per coin, according to CoinMarketCap.
So what’s happened? Reuters points out two things likely responsible for the drop over the weekend. Interestingly, weekend trading can often be bad for cryptocurrencies. As Reuters points out, lower trading liquidity “tends to plague cryptocurrencies at weekends.” But the main issue affecting bitcoin this past weekend was likely fears over the omicron Covid-19 variant. As CNBC notes, the specter and uncertainty around how bad the omicron variant will be for both people and the economy sent investors to safer and more stable investments than cryptocurrencies, such as the 10-year U.S. Treasury note.
So where does bitcoin go from here? No one can say for sure. But it’s reasonable to assume that until uncertainties over the omicron variant and its possible effects on the economy are overcome, cryptocurrencies may continue to be more volatile than normal.