Nobody expected the 2017 Bitcoin return at the end of 2016.
In 2017, Bitcoin’s price increased enormously and this growth was even exceeded by Ethereum and Litecoin. The whole cryptocurrency market grew, following the Bitcoin trend.
Bitcoin rose in a way that graphically reminded many people of the major historical speculative bubbles, one of which was the Dutch Tulip Mania that collapsed in 1637.
This led millions of people from all over the world to enter the crypto market, forcing some of the major exchanges, like Bittrex, to suspend new registrations.
Bitcoin, after reaching its all-time high, then lost about 70% of its value, dropping to around $6,000 on 6 February. This fall has led the news media to put the spotlight on Bitcoin’s critics. These are people who recognize the value of the underlying technology called Blockchain but, at the same time, believe that Bitcoin has no future.
What news has influenced the price of cryptocurrencies?
The following are some of the news items that have most influenced the crypto market over the last two months:
- 11/12/2017: Introduction of Bitcoin futures on CBOE (1)→ POSITIVE NEWS.
- 11/12/2017: Charlie Lee (founder of Litecoin) tweet → NEGATIVE NEWS:
- 20/12/2017: Charlie Lee states on Reddit that he has sold all his holdings in Litecoin in order to avoid potential conflicts of interest → NEGATIVE NEWS.
- 20/12/2017: Coinbase announces the introduction of Bitcoin Cash on its exchanges → NEGATIVE NEWS FOR COINBASE because the Bitcoin Cash price surged before the announcement and this led to allegations of insider trading. Coinbase denied any wrongdoing.
- 04/01/2018: Coinbase rejects rumors regarding Ripple listing →RIPPLE (AND STELLAR) PRICE DROP.
- 24/01/2018: Weiss Ratings issues its grades on cryptocurrencies (4)→ MIXED REACTION from the market. Some of the cryptocurrencies that received good grades climbed.
- 30/01/2018: US regulators subpoena Bitfinex for Tether (5)→ NEGATIVE NEWS.
- 05/02/2018: China crackdown on cryptocurrency trading and ICOs (2)→ NEGATIVE NEWS.
- 06/02/2018: Senate cryptocurrency hearing (3)→ NEGATIVE EXPECTATIONS but POSITIVE RESULTS.
- 17/02/2018: Vitalik Buterin (Ethereum founder) tweet → NEGATIVE NEWS:
Is the Bitcoin price manipulated?
Some argue that the Bitcoin price has grown artificially because it has been manipulated in various ways. One of these is via Tether: a currency pegged to the dollar, called “stablecoin” because of its purpose, with a market capitalization of $2.2 billion. Many critics claim that USDT is not really supported by the dollar and therefore it is equivalent to fake money. Moreover, it has been observed that, strangely, the Bitcoin price climbs shortly after new Tethers are printed. This has led many observers of the market to suppose that new Tethers are being printed in order to pump and support the Bitcoin price, and therefore to profit from this process.
What are the predictions for 2018?
The cryptocurrency market seems to have reached a saturation point in December. Now it is very difficult to make predictions for 2018. If you ask Bitcoiners, they will tell you that Bitcoin is going to keep growing until it reaches $100,000 or even $1,000,000. In contrast, if you ask those who haven’t invested in cryptos (called Nocoiners by Bitcoiners), they will tell you that cryptocurrencies are a scam or a bubble, and investing in this market will mean losing all your money.
It’s up to you to decide which side to join. If you believe that cryptocurrencies have a future then you might consider an investment; if you think they have no future then do not invest.
Have you invested in cryptocurrencies? Would you recommend a specific cryptocurrency?
What are your predictions for 2018?