Happy Holidays to you all, as Christmas certainly has come early for those heavily invested in bitcoin who saw price gains as big as $1500 over the course of 24 hours last week. In this week’s edition, we analyze some of the rationale that keeps the price of bitcoin shooting towards the far regions of the solar system, discuss the philosophical underpinnings of the “HODLing” investment technique, and discuss why it may remain the most sound practice for those who don’t mind keeping their money in BTC form for years to come.

Bitcoin Poised to Make a Major Move — Direction Unknown

Over the past week, bitcoin saw another impressive gain, this time it was about 14%, which by this point equals an astounding $2,000. Needless to say, new highs were set for BTC, which tried hard to bust above the $20,000 mark, but topped out at $19,666 before settling back down back to around $19,000. The positive “catalyst” we mentioned in last Thusday’s Check-Up article indeed came to fruition as more Wall Street analysts publicly jumpexxd on the “bitcoin as digital gold” bandwagon, some of them now predicting price increases up to $400k per coin within the next couple of years.

While these bullish predictions certainly sound attractive and present a strong case for long-time “HODLers”, who in general have been right all along in refusing to sell their stashes during the wild, volatile swings that define the history of price movement of BTC, financial market oversight committees in several countries have issued warnings about an imminent burst of the dreaded “bitcoin bubble,” largely due to the negative impact that “bitcoin futures” markets could have on the price of BTC.

As we’ve previously mentioned in past Roundups and Check-Up articles, such markets will allow Wall Street-size money the opportunity to bet against bitcoin, potentially allowing for the potential of a major drop in price. Whether or not they will be outweighed by the power of bitcoin “bulls” is to be seen, the fact remains that bitcoin futures markets and the introduction of bitcoin-based ETFs could potentially create a figurative “needle” powerful enough to burst the bubble. The first of such futures markets opened for business on Sunday the 17th and are being blamed for BTC’s inability to cross the $20,000 threshold.

BTC Futures and ETFs a Good Thing?

On the other hand, some analysts see the introduction of bitcoin futures and ETFs as a potential catalyst (instead of detractor) for the price of BTC, perhaps creating an exponential rise that would make the cryptocurrency a trillion dollar industry as opposed to its current status as a billion dollar industry. Such markets are predicted by some to further legitimize bitcoin as a geniune investment, potentially helping to bring stability to the cryptocurrency and attracting even more deep-pocketed investors who were previously on the fence due to bitcoin’s murky legal status in most parts of the world. In either case, bitcoin is certainly a one-of-a-kind investment that has left classical investment strategists baffled, and its popularity is showing no signs of slowing down as Google recently reported that the word “bitcoin” was the #2 most searched-for term in 2017.

Having “shakey hands” while trading bitcoin has never paid off in the past as the price of BTC has done nothing but go up and up and up over the course of its lifespan. Nevertheless, it is best to inform oneself as much as possible about the potential impact that futures markets could have on the price of the coin, especially if you are heavily invested and on a mission to maximize profits. We here at Coin Clarity are not financial advisors and would never claim to be so, but we can see that “HODLing” has always been a good investment strategy, and until something majorly bad happens (even worse than another MtGOX-style exchange collapse), its probably best to continue believing it will remain so.

Also in the News

  • A project inspired by geodesic camping domes first made popular during past Burning Man festivals and now frequently used by FEMA and for other housing purposes worldwide is issuing its own cryptocurrency via an ICO scheduled to launch next month. The company responsible for inventing the tents are raising funds by letting investors purchase “Sheltercoins” directly with cash, bypassing classic ICO release platforms like Ethereum, NEM and Lisk. Purchasers of the coin will be rewarded with steep discounts on these revolutionary, portable housing units, incentivizing investors who are big on remote camping or who simply want a place to sleep comfortably and cheaply.
  • CryptoKitties,” an Ethereum blockchain-based game where users can purchase, trade and sell unique digital “kittens” is causing something of a slowdown in the Ethereum network, accounting for up to 11% of all Ethereum traffic. More than 22,000 “cats” have been sold thusfar, totaling over $3 million in ETH transactions. The Ethereum platform is quickly becoming recognized for its gaming potential as several other game and gambling-based ICOs have emerged in 2017, making use of its advanced, open source API functionalities in order to transform online gaming in ways previously unimaginable. This helps clarify the differences between bitcoin and Ethereum, which is coming into its own as a crypto that can serve purposes other than acting as a currency, even though it has been on a tear recently and is doing quite well as such.
  • Long-standing bitcoin resource center and trusted wallet provider blockchain.info recently added support for Bitcoin Cash (BCH) after overwhelming demand for them to do so compelled the Luxembourg-based company to add a third coin to their wallet service (the third being Ethereum, which they have supported for a few months now). Though BCH has largely been considered just another fork attempting to “cash in” on the good name of bitcoin (no pun intended), its price currently sits at about $1,870, putting it in 11th place in terms of overall market capitalization of all cryptocurrencies.