There is a saying that the markets have adopted over time: “Buy the rumor, sell the news. ” And the cryptocurrency market is no exception. Bitcoin’s price recently shot up to $ 18,000 USD with minimal news coverage if we compare its coverage in 2019.
However, another rule that I personally respect: “If your mom talks about it, it’s a strong signal to sell“. By “mom” I mean anyone who is not generally associated with the specific market.
Maisie Williams. aka Arya Stark in Game of Thrones. asking its 2.7 million subscribers for their opinion on the price of Bitcoin.
A recent poll by Maisie Williams, the actress who played Arya Stark in Game of Thrones, asked her 2.7 million subscribers if she should go Bitcoin for long. This begs the question, does Bitcoin have a fundamental basis for going higher?
Bitcoin – Inflation hedge?
Goldman Sach’s take on Bitcoin and cryptocurrencies.
Some people think that Bitcoin and cryptocurrencies are a natural hedge against inflation. As the Federal Reserve and the US government take on more debt, alongside the Federal Reserve which places particular emphasis on inflation, many fear holding fiat currency. However, many companies reject the idea that Bitcoin is a hedge against inflation, much more than a MacBook Pro, or that peanut butter is a hedge against inflation.
A few months ago, Goldman Sachs emailed institutional investors, pointing out that cryptocurrencies “show no evidence of inflation hedging,” making it one of several companies to oppose this assertion. However, that is not to say that Bitcoin is not an acceptable alternative asset class for hedging against inflation; it is simply less affected by inflation.
Bitcoin – A suitable alternative to fiat money?
Many people think that Bitcoin has excellent qualities for an alternative currency. However, this is simply not the case. A currency needs stability in its value, but Bitcoin is anything but stable.
We will take the coffee I buy each morning as an example. For the sake of argument, we’ll be pricing Bitcoin at $ 1 USD at the start of 2019. My coffee price is $ 4.
|Date||Bitcoin value in USD||USD value||Variation|
As you can see, at the start of the year I could afford to buy this coffee for $ 4. However, around March that same $ 4 worth of Bitcoin is now worth $ 2.16, meaning I couldn’t have afforded the $ 4 coffee.
Against the US dollar, I bought that $ 4 all year round. I understand this is a flawed test because we can say that if the price of coffee was in Bitcoin the hypothesis would be reversed. However, with such massive fluctuations, it would be realistic to assume that we would have a situation similar to Venezuela, where the prices of goods and services fluctuate from day to day. This shows that Bitcoin is more similar to gold or commodities in general.
Bitcoin – Interbank possibilities?
One of the attractions of Bitcoin and cryptocurrencies in general is the low transaction costs it has. Transfers from banks from one country to another can incur fees of several hundred dollars or even more when larger sums of money are transferred. However, with a centralized system, Bitcoin and many cryptomonnaies result in negligible transaction costs.
For example, Silk Road, an organization that sold illegal services on the dark web, was attacked by the FBI, in which they took billions of dollars in Bitcoin because it was the medium they used to transact. . It was noted that over US $ 1 billion worth of Bitcoin was transferred from one account to another, resulting in a transaction cost of $ 15.
Cryptocurrencies are undoubtedly a strong substitute for interbank transfers, and we can see that this is playing out slowly within large institutions. JP Morgan Chase and Goldman Sachs have both appointed a new global head of digital assets, with JP Morgan exploring the possibility of creating its own Bitcoin-like blockchain.
Bitcoin – “Network Effect” at Play?
Returning to the original paragraph, Maisie Williams’ question on whether it should ‘go long’ on Bitcoin highlights the general overview of what people think cryptocurrency is currently – as a medium. to earn money quickly.
Billionaire Mike Novogratz and former fund manager of investment firm Fortress Investment Group, said he believes the price of Bitcoin will reach US $ 65,000. Novogratz said he expects the price to hit $ 20,000 first before hitting $ 65,000 USD due to the “network effect”, in which there are a ton of new buyers and a reduced supply. , “So YES, but this. In other words, he is currently long on Bitcoin and wants the “biggest fool” theory to take place to push his position up.
Bitcoin – Techniques play well with the coin
Will history repeat itself? Or will it make a much higher move?
Currently, Bitcoin has gone from its high of $ 18,500 to $ 17,584 USD within a matter of hours. He is currently approaching a high psychological level of $ 17,000 USD. A move below this level, along with risk sentiment, could cause a move to a 100% retracement level at $ 13.914 USD. Bulls may see this as an opportunity to move up to a 161.8% Fibonacci level, above its all-time high. If he breaks this level, the Bulls can reach him at levels never seen before,
However, Novogratz’s theory makes sense and could be the main driver of the price hike. Therefore, it is worth arguing that it is probably time to buy some Bitcoins.
Article by Kyle Quindo » BlackBull Markets » Official site
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