Sir Isaac Newton was the first to coin the phrase “what goes up must come down” in relation to gravity, but now it seems bitcoin is subject to that law as well.

Today the cryptocurrency dropped in value by more than $1,000 in trading after hitting yet another record high of $11,363.99 during the day.

The seemingly never-ending bull run turned officially just before midday EST, with the price dropping to $9,295.75 several hours later before buyers re-entered the market to push the price back over the $10,000 mark.

Why the price dropped so dramatically is subject to speculation. Coindesk noted that sell orders began piling up on exchanges around the same time it was reported that Coinbase Inc. suffered a major outage and that the bitcoin price on Coinbase hit a low of $8,593 just prior to it going dark.

There are also some reports that other exchanges, including GDAX, Gemini and Bitstamp also suffering downtime, although Bloomberg claimed that it was thanks to unprecedented volumes of trading versus anything more serious.

A more interesting theory for the price rise and subsequent fall came from Christopher Grey, co-founder and chief operating officer of CapLinked Inc., who told SiliconANGLE that he believes that the large market fluctuations are driven by “people who are using the media to manipulate the prices of various coins for quick profits both up and down, especially because nobody is regulating or watching these markets.”

Grey noted that “market manipulation that would be illegal for most other things can be done basically without risk for now in these crypto markets.”

There are people with vested interests in the market who have been talking the price up. For example, a hedge fund trader who is preparing to launch a digital assets investment fund said earlier this week that he could see the price of bitcoin hitting $40,000 by the end of 2018.

Whatever the reason, the price plunge serves as a wakeup call for the countless investors rushing in to buy bitcoin off the back of increased media exposure. The price plunge is also not without precedent, with bitcoin having a long history of price increases followed by large drops, the most recent only three weeks ago.

That said, those holding on to bitcoin for the longer term continue to see the value of their holdings grow. The question is whether short-term volatility will turn into long-term growth or long-term decline.

Photo: Erik Cardenas/Wikimedia Comons