I still bring Bitcoin up to people on a regular basis and I can’t tell you how many times people who never really were paying much attention to it have responded with, “is Bitcoin still around?”
And I usually reference the fact that it has a $100 billion PLUS market cap and has come quite a long way in 10 years. Yes, it’s still alive.
I know why sentiment has collapsed though. Since Bitcoin’s high of $20,000, we’ve seen quite the pullback to $3,000 back up to $14,000 earlier this year, then going on the downtrend.
We saw Bitcoin hanging out around the $8,000 range for a while, then fell under into the $7,000 range for another blow to the bulls.
While I’ve been predicting a quick Bitcoin surge for a while now, timing the pop has been challenging, which is why I tend to prefer patience over market timing as a strategy. This week for Bitcoin holders the price has rocketed from $7,500 to $10,500 (currently settling at around $9,400) within a span of 24 hours.
This was Bitcoin’s biggest daily gain since 2011 – but a 30+% gain in a matter of hours and waking up a lot of people and continuing to solidify itself as its position for the future.
In actuality, there were two events that have caused this single-day price move.
- First, there was the announcement on Twitter by Bitcoin futures trading platform Bakkt that 1,179 Bitcoin futures contracts traded on their exchange, marking a daily record for them.
Bear in mind that the crypto critics had expressed disappointment in Bakkt’s first day, in which very few Bitcoin futures contracts had been traded on the platform and what I said, was this buildout just needed more time.
No one’s calling Bakkt a failure now, of course, and the institutional capital flowing into the cryptocurrency space is growing day by day. That’s the difference between the current Bitcoin price recovery and the bubble of 2017: it’s not just the retail speculators that are getting into crypto this time, as the smart money is buying as well.
Bakkt was a factor, no doubt, but there was a much bigger catalyst at work here, and it came from a place where hardly anyone expected words of encouragement: China.
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One thing I’ve always said when people ask me if I think countries are going to ban and outlaw crypto currencies, is that capital will flow to the path of least resistance and the jurisdictions that understand that will be poised to benefit from it.
- Coming straight from Chinese President Xi Jinping “we must take blockchain as an important breakthrough for independent innovation of core technologies… increase investment… and accelerate the development of blockchain and industrial innovation.”
Remember, this is a nation that was notorious for harsh cryptocurrency regulations, including a moratorium on initial coin offerings. This 180-degree turn in attitude on the blockchain signals a much more relaxed attitude, which could translate to policy easing in China.
This was in my opinion the reason Bitcoin went on a tear…
The dominos are falling and Mark Zuckerberg has hinted that China will be launching something similar to the Libra Project in the coming months, and I agree with him that America needs to step up its blockchain-development efforts if it’s going to remain competitive with China.
This is a trend that is unstoppable. It’s like trying to contain water in your hand. Blockchain technology is the path of least resistance for many things and countries that understand this will have competitive advantages over those that choose less efficient and more expensive ways to operate.
I’m a Bitcoin fan and I think higher prices will support my biases longer-term.
Gold has really made a turn the last few trading days and we are seeing very strong support for higher prices at the $1,500 level.
2019 will prove to be a great positioning year for gold. I will be making an announcement regarding this within the next 36 hours.
Be sure to be checking your inbox for a special alert.
Chief Editor, CrushTheStreet.com
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