Bitcoin specifically has jumped over 40% within the last week to a high of $4200 against the US dollar, highlighting the sustained interest cryptocurrencies have enjoyed since their inception. Many factors have contributed to this new interest in the currency, and traders everywhere are looking to see if the trend will continue.
Let’s take a look at some of the mitigating factors that experts are using to make an informed decision about the future of Bitcoin.
The Hard Fork
Although this is a more technical aspect of Bitcoin, the concept is simple enough for even the layman to understand. Bitcoin recently experienced a “hard fork” in the currency, which is similar to, but not identical with, a stock split.
In general, stock splits are good news for investors, as the split means more shares for the holders of the stock. The split of Bitcoin into Bitcoin/Bitcoin Cash worked in much the same way. Anyone who held Bitcoin before August 1, 2017, received the same amount of their holdings in Bitcoin Cash.
Currently, Bitcoin Cash trades at around 8% of Bitcoin’s price, which is a great dividend in any market. Although Bitcoin Cash may flop, it currently has value that may be traded on. It could also possibly become a viable currency of its own in the future.
Interest Overseas
Whenever an alternative currency gains mainstream traction, investors expect a jump. The inclusion of Bitcoin in recent trades against Japan’s yen help to solidify the alternative currency in another huge global facing marketplace.
The willingness to trade a currency for goods and services is at the basis of its value. With just under 50% of recent trading in Bitcoin coming from Japan, it would seem this economy has begun to embrace alternative currency.
The saber rattling between US President Donald Trump and North Korea dictator Kim Jung Un shook markets around the world. Investors generally look for safe havens when global peace is threatened, and Trump’s “fire and fury” statement sent financial experts running for the hills. When the dust settled, it turns out that some experts actually look at Bitcoin as a safer investment than gold. Bitcoin actually far outpaced the precious metal in its rise over the past week.
Interest from Institutional Investors
Rumors abound that the big banks are looking into Bitcoin as a viable investment. Investors from Goldman Sachs, Citigroup and respected tech leaders such as John McAfee have announced public support for Bitcoin. Goldman Sachs released an official report detailing that many institutional investors are “finding it harder to ignore Bitcoin.”
Many of these individuals have touted huge value for alternative currency in general. McAfee is perhaps the most bullish, saying the Bitcoin has the potential to reach a value of $100,000 against the US dollar in less than 10 years. Whether or not this occurs remains to be seen, but piggyback investors will take that kind of news as law in the short term.
Improved Accessibility
Mainstream trading outlets are connecting to alt coin exchanges, making Bitcoin and other alt currencies easier to access. Simply getting into the alt coin market can be somewhat confusing for a rookie. Alt coin exchanges such as Coinbase have not received the publicity of mainstream stock exchanges. These exchanges are also more difficult to sign up for and use. However, this is slowly changing.
As the mainstream consumer gains easier access to Bitcoins, it is only natural that there will be a rise in the use of the coin. More volume equals more commerce; more commerce equals a higher value for the coin.
There are many investors who are noting that the leading mainstream exchange Fidelity has connected to Coinbase, allowing Fidelity users to monitor Coinbase accounts with less overall hassle. Not only does this give Bitcoin holders more accessibility to their coins, but it also introduces the concept of Bitcoin to many investors who may not have heard of it before.
Whether you agree with the idea of an alternative currency or not, the idea has definitely passed its initial tests. The base under Bitcoin and other alt currencies is only getting stronger. Governments around the world are working with it instead of trying to destroy it.
With the wind at its back, the future looks bright for Bitcoin.
Regards,
Ethan Warrick
Editor
Wealth Authority
