Bitcoin is dead! Or is it?

The 18 months leading up to Christmas were a real boon for crypto currencies, with growth in the 1000’s of percentage points and even Dierdre at the local post office talking about Bitcoin and the blockchain. Many prominent financial figures and major banks took a swipe at the new toy on the market calling it a fad but from $1,000 in April to $2,000 in July to $4,000 the next month, it defied their calls. $7,000 in October and up to almost $20,000 in December and a realisation dawned, this could get out of control.

There was a growing feeling that this new currency really was a viable option in our tech driven age and that if Bitcoin really couldn’t be manipulated by interest rate movements and the like then it would threaten the long-term hold of major currencies and those same bodies and institutions that aim to control them. The new year arrived and perhaps the major Institutions hadn’t got their fill on the way up so with the introduction of Bitcoin to the Futures market just a month or two earlier they could now trade in real size and hope to pick some up at a more desirable price. It could also be said that this was simply profit taking but the price halved quickly, and then again and to stop the tide turning the introduction of advertising bans and some countrywide bans of using or trading it came into force with the powers that be stating they were saving the retail investor from a possible “scam”.  This obviously only helped to drive the price lower and creating a self-fulfilling prophecy.

Now the dust has settled. The price is almost a quarter of its highs, sceptic or not, it could be viewed a little coincidental that the country and advertising bans are now being lifted, the prominent figures and Institutions are no longer going out of their way to knock Bitcoin and its peers and the price may just have found a nice support to build from. Have the institutions managed to get involved at a price they prefer now? Will the potential Bitcoin ETF really be the second catalyst to Bitcoins resurgence? Or has confidence in Bitcoin really gone too far?

BTCUSD-Tradeview
July 17, 2018

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Adam Saward

 

Adam Saward
Head of UK Business Development
asaward@tvmarkets.com