Bitcoin's Wild Ride to $11,000: More Volatility to Come?
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What is the main topic discussed in this episode?
This is Your Money Matters from The Wall Street Journal. Welcome to Your Money Matters. I'm J.R. Whalen with Anne-Marie Fertoli in New York. Even by Bitcoin standards, Wednesday was a wild day for the virtual currency. It raced past $11,000 Wednesday morning, only to freefall to roughly $9,500 later in the day. Wall Street Journal cryptocurrency reporter Paul Vigna, co-author of The Age of Cryptocurrency, joins us to make sense of this. So, Paul, the latest run up by Bitcoin has been attributed to investor interest. What do you think triggered the volatility on Wednesday?
Well, we should probably point out, you know, as we start this conversation, Bitcoin's at ninety five fifteen dot eleven. Looking at my app, who knows what it'll be at by the time we finish it. I think what you had today was and this is on Wednesday. I mean, you had a it was a feeding frenzy, whether that was a lot of new investors getting in or experienced investors, people with large positions who have been in it for a while. I think it was just everybody was kind of rushing in. The numbers were going up.
What happened during Bitcoin's dramatic price swing to $11,000 on Wednesday?
The price was going up at such a fast and furious clip. You had people who were just and look, you have to remember, A lot of Bitcoin trading is done by people who are inside the industry, who are sort of true believer types and are constantly interested in buying because they think this thing is going higher. So you have this sort of mindset of buying to begin with. You don't have a lot of ways to short Bitcoin. Bitcoin is mainly a one way trade. You know, so you have people who believe it's going to the moon. Anyhow, you have all this sort of newbies coming into it for the first time because they've heard stories. It's at eight thousand. It's at nine thousand. So today what you had was just sort of a feeding frenzy, just a ton of people surging into what is still a small market.
And the volume numbers today are at a record high. And it just overwhelms some of these exchanges. That's simply what happened. Some of them had some they went down. Some of the websites just went down and you had a lot of people jumping in. It hit 10,000 last night, 11,000 this morning and went up to I think the high was 11,377 and then it was just a free fall. And this is not unusual for Bitcoin. Bitcoin has a history. It can go up and down 20 percent in a matter of hours. That is not unusual for Bitcoin. And that is what happened today. So it sounds really spectacular and outrageous and no one can believe it. Oh, my God. Eleven thousand and nine. It's not that unusual for Bitcoin.
We've seen the volatility before, as you just mentioned. But are wild swings like what we saw on Wednesday becoming any more frequent or a new sort of norm?
Bitcoin kind of goes through waves where sometimes when interest picks up and look, a lot of this is is driven by interest. You know, so when interest picks up, you will start to get these kinds of waves and you will get new people coming in and smart people who have been in who want to take some profits. They'll sell to the new people. And it's that kind of a dynamic. Then you have other times where Bitcoin is really kind of flat and boring. And for a lot of actually 2015 and 2016, Bitcoin was flat and boring. This year, that has changed. That dynamic has changed. Bitcoin has become fun again. And if you're writing about Bitcoin, it's absolutely great. If you're investing in it, I would not even want to think about the kind of of.
Iron constitution you have to get to live through this writing about it. It's a lot of fun, though. So Bitcoin does it goes through these kinds of swings. This is not really unusual. What's different is that the dollar numbers have gotten so high that these look like gigantic moves.
You know, what's kind of ironic about this, about the recent run up is that. And even with Wednesday's decline, notwithstanding the fact that most individual Bitcoin investors aren't making a lot of money off the fast climb, because is it true that in the individual wallets, they don't hold a terribly large amount?
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Chapters
4 chapters
1
What is the main topic discussed in this episode?
0:02–1:13
2
What happened during Bitcoin's dramatic price swing to $11,000 on Wednesday?
1:13–5:03
3
Who was driving the surge — new retail investors or industry insiders?
5:03–8:16
4
Why did trading volume and exchange outages amplify Bitcoin's spike and crash?
8:16–8:33
Speakers
3 identifiedMore from WSJ Your Money Briefing
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