Things have been looking up lately, as the total cryptocurrency market capitalisation again touched US$300 billion, with bitcoin leading the fray. Having touched the bottom of US$5800, it rebounded to US$8300 – a gain of 30%!
Pundits and pied-pipers are again touting that the next stop is for bitcoin to hit US$10,000 and then take out US$20,000! So, what’s really happening?
ETF to pave the way, if not – nevermind anyway
Naysayers are saying all sorts of things; from the Bitcoin ETF not being approved, to “see what happened when the market saw the entry of bitcoin futures – it tanked”. One could argue that ETFs will not function the same as futures, as ETF issuers must back their instruments with real assets, i.e. bitcoins. Infact, the run-up to US$20,000 in December 2017 was claimed to have costed only US$8 billion. The market doesn’t really take much money to move – and should be really good news for bitcoin fans.
While the market is definitely looking forward to a Bitcoin ETF being approved, it is not going to affect the market too much – just refer to the recent rejection of the Winklevoss ETF application. Bitcoin dropped momentarily, but rebounded anyway.
Trading volume picking up
Bitmex, known as one of the largest bitcoin futures trading site in the world, has recently reported all-time highs in their site’s trading volume – US$8 Billion, or about 1 million bitcoins in a single day!
It is quite obvious by now, that hedge funds, high net worth individuals and “some” institutions are getting into bitcoin in a big way. This could spell one thing – these players know that progressive regulations will soon create a fertile ground in which bigger money could enter, and drive the market all the way up?
2018 might have started slow – even Binance declared that they were making lesser profits than before. But, if trend is anyone’s friend – August to December 2018 could see very interesting times.
Conclusion
On the back of bitcoin’s return, expect to see ICOs picking up again, as many projects have been put on hold since beginning of this year. Alternative coins (Alts), which have been absolutely pummelled since beginning of the year, will see a return as well – so if you’re not invested yet, now could be a good entry point.
However, don’t take my word for it – I’m not an investment advisor.
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Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at [email protected].
