Bitcoin has taken investors on a roller-coaster ride, and although its value has risen dramatically since its inception more than a decade ago, it's had plenty of huge downdrafts along the way. The latest plunge in bitcoin, though, comes at a time when many would've thought the cryptocurrency would be most likely to soar: in the wake of the global COVID-19 pandemic.

On Thursday, bitcoin suffered its worst one-day drop in years, falling from $7,600 to $5,300. The price of the popular cryptocurrency approached $4,000 at moments on Thursday night. Shares of the bitcoin-tracking ( Grayscale Bitcoin Trust OTC:GBTC) followed suit. With the price of bitcoin having been above $10,000 as recently as mid-February, the question many crypto investors have is why the token's price failed to deliver on its promise as a safe-haven asset in times of turmoil in the traditional financial system.

How the coronavirus infected bitcoin's investment thesis

For a long time, cryptocurrency advocates have argued that tokens are ideal safe havens from the uncertainties of the broader financial markets. With a fixed supply and strict rules for releasing new tokens onto the market, bitcoin arguably isn't subject to the same manipulation that central banks and government entities can use with their fiat currencies. In past events that have caused strain on the financial markets, bitcoin and other cryptocurrencies have typically seen their prices rise. Moves like the Federal Reserve's injection of liquidity into the credit markets on Thursday certainly seemed to be the sort of thing that would usually inspire bitcoin investors to get more bullish.

In that light, the coronavirus-inspired plunge in bitcoin prices seems anomalous. Yet the knee-jerk explanation from many financial experts for bitcoin's plunge was that cryptocurrencies had essentially lost their safe-haven status and were once again perceived as a risky asset. That's inconsistent with the basic investing thesis many cryptocurrency investors have in justifying their bitcoin holdings, and if it's true, it would potentially be a big blow to the idea that bitcoin offers a safe alternative to fiat currencies and assets that are tied to those currencies.

Is there another explanation?

Although Thursday's drop in bitcoin was most notable, the decline in the crypto token's price started to accelerate earlier this week. That happened to coincide with the dramatic plunge in oil prices stemming from news that Russia and Saudi Arabia had failed to come to an agreement in limiting crude oil production. With bitcoin and other cryptocurrencies playing a key role in those parts of the world, the connection to this hit to the energy markets made some sense.

However, those who are more familiar with the cryptocurrency markets pointed to another possible cause. A Ponzi scheme run by an entity called PlusToken has taken advantage of cryptocurrency investors in China and Korea in recent years, fraudulently taking roughly $2 billion in bitcoin and other tokens from the scheme's victims. A cryptocurrency exchange executive said that sales of bitcoin by PlusToken might have been a contributing factor in starting the avalanche of downward price action, with the Ponzi scheme con artists reportedly moving their crypto holdings in ways that would make it more difficult to track sales.

What's ahead for bitcoin?

The problem that bitcoin and other cryptocurrencies face is that there's no single reason why investors choose to own them. Some see bitcoin as a legitimate alternative to fiat currencies, but others simply speculate that they can buy bitcoin low and sell it high, with the primary goal of increasing the value of their dollar-based portfolios.

As long as risk-sensitive speculators are heavily involved in the bitcoin market, cryptocurrency investors can expect to continue seeing violent price swings -- even for reasons that don't seem to make sense. It'll take a more concerted effort to unify bitcoin users with a common purpose in order to smooth out the cryptocurrency's price action going forward.

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