After some uptick last week, bitcoin started the week in the red still reeling from SEC’s rejection of a bitcoin ETF last week. Volumes are down although the pioneer cryptocurrency has managed to stay above $8000. The weak hands have been pushed off the market due to the prolonged slump and interest has generally reduced. So, what should we make of the situation?
It is important to infer from the historical pattern of bitcoin. Such deep corrections seen between the beginning of this year and now are nothing new. It is part of the very character of bitcoin.
Such dips have always preceded unprecedented rallies in the history of the highly volatile asset. The rebounds have always been spectacular defying all expert predictions.
Last week saw a significant surge raising hopes that bitcoin had finally reached the bottom of the dip. It turns out much of that surge was due to hopes for a bitcoin ETF although Vitalik Buterin, the Ethereum founder seeks to downplay this.
Nevertheless, bitcoin dropped further to about $7800 early Tuesday before quickly bouncing back to around $8100.
Investors like Peter Brandt see $9400 as a real possibility in the short term. Going by the uptrend in the last two weeks, it is quite possible to see this happening. Let’s not forget that BTC has already tested $10,000 more than once in the last three months.
Store of Value
The latest surge added about 40% to its value and boosted its dominance to about half the market. Bitcoin is reasserting its position as a veritable store of value for investors in this space as the altcoins make significant losses and all the more reason you might want to buy bitcoin uk right now.
Save for outliers like Polymath which has surged about 40% after it was listed in Binance. Even then, it is unlikely to sustain this in the absence of momentum in the rest of the market. The situation in the rest of the market does not look so good right now where volumes are generally low as people move their funds to BTC.
EOS, the token backed by the likes of Peter Novogratz is particularly taking a big hit with more than 10% losses in the last 24 hours. Bitcoin on the other hand is down about 1.4%. Bitcoin might even head lower in the coming hours but it is still the cryptocurrency to watch if you are in it for the long term.
A case for bitcoin
About this time last year, bitcoin was just above $2763 before the record surge that is now widely known. That means you would be having close to $30,000 if you had invested $10,000 last year around this time.
Could this pattern be repeated again this year? There is no telling. What we can however say is that it has happened several times before. If it holds true, then this is these are the cheapest prices to get the digital asset.
There are other pending bitcoin ETF applications too structured a bit differently from Gemini’s so there’s still hope for greater institutional money coming in.
Of note is that there is greater recognition of bitcoin and other cryptocurrencies in various jurisdictions. Top figures who were hell bent on bashing it are also slowly changing tune to a more positive one.
Tim Draper who has previously made accurate predictions in the past thinks bitcoin will continue to grow in 2018. Llew Claasen of Bitcoin Foundations puts his prediction at $40,000 and the Winklevoss twins put theirs at an astounding $320,000 in the longer term.
Several factors will of course determine whether bitcoin reaches these very optimistic levels. But scarcity, first mover advantage and bitcoin’s growing distinction as a store of value will definitely play in its favour.
The dust is obviously still settling so, again, it’s important to only spend what you can afford to lose. If you come to that decision you can conveniently buy bitcoin with PayPal from some of the best exchanges. And of course don’t forget to get yourself the best bitcoin wallet here.