The wild ride continues for Bitcoin investors. Bitcoin dropped below $6,000 last week, roughly 70% below its all-time high in December. Since then, the cryptocurrency surged 50%, topping $9,000 over the weekend.
The value of Bitcoin surpassed $9,000 early on Saturday, according to the cryptocurrency-tracking site Coindesk. The volatile digital currency promptly plunged below $8,000 over the next 24 hours, however, before rebounding. Bitcoin was trading at roughly $8,750 per unit as of Monday morning.
What’s happening? No one can fully explain. As economist Rober Shiller has said, cryptocurrencies have no inherent value. Bitcoin “has no value at all unless there is some common consensus that it has value,” Shiller said on CNBC.
In other words, the value of cryptocurrencies is dictated by the whims of the marketplace. And sentiment in the marketplace can and does fluctuate rapidly when it comes to cryptos: Bitcoin skyrocketed from $800 to nearly $20,0000 in 2017, before crashing in early 2018.
The rollercoaster for some other cryptocurrencies has been even more stomach-churning for investors: Ripple peaked at $3.84 in early January, before plummeting 83% to $0.60 last week. It’s back up slightly over $1 on Monday, according to Coindesk.
Bloomberg reported on Monday that Bitcoin’s recent recovery could be the result of investors sensing that regulators aren’t going to crack down on cryptocurrency trading as many expected. But it’s impossible to explain exactly why Bitcoin has surged lately—and predicting where prices will go next is pure guesswork.
What we can say is that it’s a safe bet that mainstream voices in economics and finances will continue declaring that Bitcoin and other cryptocurrencies are fundamentally unsound investments. Last week, the head of the World Bank compared cryptocurrencies to Ponzi schemes. And billionaire investor Warren Buffett has said on CNBC that while he doesn’t fully understand cryptocurrencies, “I can say with almost certainty that they will come to a bad ending.”