Weekly Roundup: BTC Does It Again, Sets New High At $6,151, Driven By Global Confidence
In this week’s edition, we set out to re-examine the rationale once again that keeps the price of bitcoin from going down – seemingly ever. We go over three of the main factors keeping BTC afloat and attempt to explain why this could just be the beginning for the rise of bitcoin, despite a near 400% rise in price over the last six months alone.
Bitcoin Does It Again, Sets New All-Time High, Defies Gravity and (almost) Everybody’s Expectations
While we hate sounding like a broken record, the major news of last week (yet again) is a new record for the price of BTC, which snapped through the $6,000 mark like it was a dry twig and headed straight for $6,200, before finally topping out at an all-time high of $6,151. In the last 30 days the price has jumped 60%, and an unprecedented 380% in the last six months. Though price gains in 2017 have typically come in waves, followed by corrections as large as 30%, the continued trajectory remains undoubtedly upwards, despite bold and unfounded proclamations by the bigwig naysayers, of which there is no shortage. The continued gains are largely driven by a few factors working in tandem and for the benefit of bitcoin:
- The prospect of the U.S. Securities and Exchange Commission (SEC) giving the green light to Bitcoin exchange-traded funds (ETFs), which they had previously rejected in March of this year (to the dismay of the Winklevoss Twins). Like other commodity-based ETFs, a bitcoin ETF would allow investors and day traders the opportunity to indirectly invest in or trade bitcoin by purchasing a stock on a major market (like the NASDAQ or NYSE) that is tied to the price of bitcoin. This would give Wall Street a direct channel to bitcoin, after which anything could happen, though a lot of big money and analysts are betting on incredible returns to come.
- Global governments – notably that of Japan and the United States – are now strongly pushing for the integration of bitcoin as a legitimate form of legal tender (Japan already has, and the U.S. is close behind). Earlier this week, cryptocurrency credit card company WireX announced plans to work with the Japanese government to create a yen (JPY) based version of their card which can be used everywhere that a normal Visa credit card could be used. Fears of a Chinese crackdown and total ban on cryptocurrency use also seem to be allayed for the moment, even though the creation of ICOs in China remains illegal.
- The fear of missing out on the next big thing is creating a snowball effect for the price of BTC. A well-documented psychological phenomenon known as “momentum investing” appears to be applying itself to bitcoin, which is basically what happens when investors a bit late to the game see something rising in value and want to be a part of it. They are afraid that if they do not get in now, they might not be able to get in later, as the possibility that bitcoin is in a bubble still exists. Indeed, comparisons between the rise of bitcoin and that of the dotcom bust of the early 2000s are becoming more and more prevalent in the financial news media.
BTC Bubble or Not, the Blockchain Is Already Revolutionizing Our Future
Despite fears that the “bitcoin bubble” could burst at any given moment, the general consensus is that the blockchain is here to stay, and while the price of BTC may be a major turnoff to the public, blockchain technology is already beginning to reshape the world in which we live. Merchant adoption of cryptocurrency is still happening at a snail’s pace, and the value behind most altcoins lies in purely speculative territory. If online vendors are still wary of accepting bitcoin for payment after all this time, why would they even consider integrating systems for prominent hard fork coins like Bitcoin Cash (BCH) and Bitcoin Gold (BTG)? Well, Wall Street and/or some very deep pockets are making big bets that they someday will, just as other altcoins have managed to carve out niches for themselves in the giant economy of the internet.
In addition to the overwhelming flood of ICOs which may or may not be legitimate, some established, very real companies are already finding creative uses for cryptocurrency. The demand for cryptocurrency mining components are creating mega profits for circuit and semiconductor manufacturers, and energy traders are looking to solve supply-and-demand problems via blockchain-based projects, some of which are already in effect. The technology is already poking its head into the educational sector, with the Massachusetts Institute of Technology (MIT, not exactly a no-name university) now issuing diplomas on their own version of the blockchain, as a form of increasing the security of the credentialing process and verification of the issuing of degrees.
Also in the News
AdGuard, an ad blocking tool, released a report detailing how up to 500 million computer users may have been infected with malware downloaded from websites that hijacks computing power to mine cryptocurrencies. The report revealed that 2.2% of the world’s top 100,000 websites covertly download mining software onto a visitor’s computer in a process referred to as “cryptojacking.” AdGuard’s suggestion is that people upate their antivirus softwares and run thorough scans on their computer in order to rid them of potential crypto mining malware programs.