Bitcoin Bounces Back (Again)?
Since the start of the year, Bitcoin has already made headlines, reaching near its all-time highs, plummeting from $1100 to $900 within a day, and let’s not forget the Chinese government stamping down on the exchanges and margin trading!
It may have taken a few weeks, but Bitcoin regained similar stability to what it had during the majority of 2016.
Bitcoin fell as far as $780 in January 2017, but quickly regained its footing at around the $900 area.
It’s still very impressive, if one looks at Bitcoin on a one-year chart (or even two years), but now, Bitcoin is on a bullish run with what seems to be a possible return to $1000 on the horizon.
News that margin trading is now more regulated and with less leverage on trades seems to have put many Bitcoin holders’ minds at ease. The price and stability demonstrates a growing confidence in Bitcoin, as the chart from CoinMarketCap shows.
What Other Variables Could be Affecting Bitcoin’s Behaviour?
While Bitcoin has been quiet in the last few days, alternative cryptocurrencies have been causing some disruption! Litecoin has officially started implementing Segregated Witness, an upgrade that enables Litecoin to scale globally and go mainstream.
Litecoin is the test net for Bitcoin. Any positive reactions to SegWit will surely help Bitcoin. It will also cause confidence to grow and give people more reasons to invest in Bitcoin or use it as a fluid currency.
Dash, an anonymous cryptocurrency, has also received applause by many for its progress, and its value has reflected this confidence.
On geopolitical uncertainty, it would be an understatement to say that there’s large amounts of political and economic instability! Trump has only officially been the president for two weeks, and he has already managed to affect the Mexican peso’s value and caused CNN’s stocks to take a tumble when he called them “fake news!”
Trump seems to be good for Bitcoin for the time being, as opposed to the likes of Hillary Clinton!
Brexit also proved to be a great, unexpected event for Bitcoin. Global markets crashed and went into meltdown, while Bitcoin holders held on to their Bitcoin, knowing their wealth was safe and increasing in value.
When and if Brexit truly happens this year or in the next few years, once Article 50 is triggered, the markets around the world will go into an even bigger meltdown. With more uncertainty looming, Bitcoin will maintain its anti-fragile nature.
Another variable is when Bitcoin reaches certain price milestones, there seems to be some type of surge. Reaching $950 would have been a huge boost of confidence for investors.
Could We See Bitcoin Back at $1000?
Although I am a Bitcoin enthusiast, no one can ever truly predict what is going to happen. I believe it can easily reach $1000 and maintain stability at that price. With the margin trading under control, the price can’t be manipulated as easily as the previous times Bitcoin has reached such prices. This time it could be much slower to get to $1000, but that would be a good thing in the overall bigger picture.
Slowly upwards = slowly downwards, and more support would be around the big milestone price if it is reached slowly and steadily.
However, it is very likely that Bitcoin can reach its all-time high and further highs. Bitcoin is still unpredictable, to a certain extent, and could surge and reach $1000 within a matter of hours. But it can do the opposite, as well. Ultimately, to attract more mainstream usage, I encourage stability and slow progress.
Overall, for the rest of 2017, we could see some very interesting developments within the Bitcoin community. Bitcoin always does well in geopolitical uncertainty!
With the amount of fear and uncertainty across the globe, the sheer amount of savvy investor capital pouring into Bitcoin could see it back at $1000 and beyond.
Parity With Gold?
Bitcoin and gold, in my opinion, are not direct competitors, but friendly rivals. Having both of these is great for a modern-day investor or someone saving up for the long-term.
The Bitcoin community likes to have milestones or targets for its price. Parity with gold is a huge milestone for Bitcoin, and gold would have something that finally rivals it in terms of what it does, but in a digital format. Would parity with Bitcoin affect gold’s price? Not at all, but it would put Bitcoin in the news and potentially help it achieve its long awaited global adoption.
Stability and Slow Growth Will Make Bitcoin Greater!
In conclusion, for stable, long-term growth, Bitcoin needs to lose its volatility and it needs to scale for global usage.
As time goes by, more investment firms will use Bitcoin, more payment processors will use Bitcoin as a payment option, and blockchain technology will be the foundation of our society’s digital infrastructure.
It will likely happen slower than people predict, but that’s not a bad thing. It helps give the everyday person a chance at being an early bird. It also helps create a strong foundation and community for any hard times ahead.
2017 will be a very interesting year; not just for Bitcoin, but all forms of smart investments.