Bitcoin’s slide from record highs is warning for crypto investors

The price of one bitcoin fell more than 5% Wednesday and was trading around $59,000, 12% below last week’s record levels. For any other asset, like a stock or bond, a drop that steep in such a short time would be considered a market correction.

Despite more than 13,000 cryptocurrencies listed on CoinMarketCap — ranging from dogecoin and shiba inu to more obscure tokens with even goofier names, such as Elon’s Marvin, Dogelon Mars, Baby Floki Billionaire and Kitty Inu…(because cat lovers own crypto too) — bitcoin remains the dominant digital currency.

Ethereum, sort of the Pepsi to bitcoin’s Coke, is worth about $475 billion. All the other cryptos are worth significantly less than bitcoin and ether.

The ProShares ETF already already has more than $1.2 billion in assets under management. The new found popularity of bitcoin ETFs, which track bitcoin futures and do not give individual investors ownership of actual bitcoins, should push the price of bitcoin even higher over the long haul.

But there are signs that some traders may be souring on bitcoin and other cryptos. An asset price can’t go up this sharply indefinitely. And bitcoin prices, even after this week’s drop, have still more than doubled this year.

Deeper corrections and bear markets are inevitable. The big swings in bitcoin prices during the past few days may be just the beginning.

“We do expect bitcoin to hit $100,000 in the future — but not this year, as we expect volatility to continue into early 2022,” said Gavin Smith, CEO of Panxora, a cryptocurrency investment consortium, in an email.

“Bitcoin is still an emerging asset class subject to very high volatility and investors should approach it with caution. Care should be taken and any investment should be considered speculative,” Smith added.