This week we examine potential reasons that keep bitcoin from breaking above $4500 in price, take a look at Mark Cuban’s latest investment proclamation and what it means for cryptocurrency, and examine the adoption of bitcoin by the third world across multiple continents.

Cryptocurrency in 2017: ‘You’ve Come a Long Way, Baby’

While the price of bitcoin seems to be facing undeniable resistance at the $4500 mark, the total market capitalization of all cryptocurrencies surpassed $150 billion for the first time on August 23rd, largely driven by the come-uppance of Ethereum, Dash and Monero. Even Litecoin, also known as the “first altcoin,” managed to break a record-high of $60 last week. When taken into consideration the fact that the total market cap of crypto stood at a paltry $17.7 billion at the beginning of the year, 2017 has thus far been the definitive “Year of Cryptocurrency.”

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Bitcoin remains in first place by a commanding lead over its altcoin competitors, with the price of BTC hovering around $4250 as of the writing of this article. Amazingly, ETH surpasses BTC by about $175 million in volume transacted per hour, meaning it is more heavily traded than BTC even if substantially smaller in market cap. These two coins account for over 2/3 of total crypto market cap, with BTC accounting for $71 billion and ETH accounting for $31 billion.

So why can’t bitcoin seem to break the $4500 mark? A satisfactory answer might be the meteoric rise in transaction fees. Despite numerous predictions putting the value of bitcoin at $5000 by year’s end, and as high as $20,000 in 3 years, BTC has met significant resistance twice already as it neared the $4500 mark. While some so-called specialists are chalking this behavior up to human psychology, the driver of the age-old art of technical analysis, perhaps the investors who truly understand bitcoin realize that a continued rise in the price of bitcoin is linked to an unavoidable rise in transaction fees. High fees put the practicality of bitcoin out of reach for everyday transactors. After all, why would somebody use bitcoin for something done cheaper by the likes of Western Union or PayPal? The activation of SegWit can only accomplish so much for bitcoin, after all.

Mark Cuban Backs New Cryptocurrency Fund by Former Coinbase Employee

Mark Cuban

Despite labeling bitcoin as being in a bubble in months past, Shark Tank star and billionaire bravado Mark Cuban publicly announced plans to back a cryptocurrency investment fund last week. The fund, known as the 1confirmation Fund, was launched by former Coinbase business development specialist Nicholas Tomaino and seeks to raise $20 million in startup capital to fuel cryptocurrency-based investments. Cuban’s signature of approval for the fund is a one-of-a-kind blessing that all but assures 1confirmation will quickly achieve their funding goal. The venture capital fund filed paperwork with the SEC on August 18th and plans to go live before the year’s end.

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Cuban’s about face in sentiment towards bitcoin and cryptocurrency in general is reflective of an underlying shift in perception by not only Wall Street but the general public as well. Not known for being soft spoken or quiet in his opinion, this glowing endorsement by Cuban is likely to propel even deeper investor interest in the cryptocurrency space. Even if the rise in the price of bitcoin is temporarily or permanently stalled, the amount of startup projects fueled by blockchain technology continues to grow, attracting massive amounts of investor cash in the process.

Also in the News

  • Chinese mega-investment firm Fosun gave blockchain technology their own stamp of approval last week. Perhaps running in parallel to Mark Cuban’s ringing endorsement of cryptocurrency, China’s largest conglomerate also recently motioned their support for local blockchain projects, starting with startup company OneChain. The move signifies that the trend of increasing comfortability in and adoption of the blockchain is not a movement limited to American borders.
  • Outside of China and America, bitcoin and bitcoin mining is also becoming popular in the hyperinflation-prone country of Venezuela, where the local currency, known as the bolívar, has been subjected to wild swings in volatility as of late. While bitcoin remains highly volatile itself, the trend in price of BTC remains upward, while that of the bolívar remains downward.
  • Vietnam has added itself to the short list of countries ready to fully endorse bitcoin, announcing plans to completely legalize and regulate it by 2018. A number of Asian nations are already more bitcoin friendly than the United States, China and Russia, where government indecision on how to deal with the cryptocurrency has stalled any sort of meaningful legislation attempting to regulate it.
  • Other Asian countries like the Philippines are seeing partnerships between bitcoin startups, banks and retailers that make it easy for anybody with a phone and/or bank account to purchase bitcoin and convert it to a digital form of the local peso. Digital pesos can then be used to buy cell phone minutes or data plans for any phone with a Philippines number, pay utility bills or even tuition fees.
  • Though government bureaucracy and red tape is somewhat essential for maintaining order among a vast body of population, it frequently results in the slowing or death of innovative ideas. The decentralized nature of bitcoin has thus far rendered it seemingly unstoppable, proving it difficult to stop good technology from changing the future.