Thursday, February 25, 2021

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The Bitcoin Boom & Bust: To Infinity & Beyond?

 

In January 2018, BTC busted through the proverbial sound barrier of crypto pricing, only to plummet spectacularly thereafter. It’s like déjà vu all over again. BTC reached its apex of $42,297 per unit BTC, and now it’s on its way down, albeit with a few stops and starts along the way.

The recent performance of Bitcoin (BTC) is best summed up in one word: inexplicable. Yet, for BTC, it is not unexpected.

bitcoin_chart3 bitcoin_chart2

This begs the question: What is it about this contrarian cryptocurrency that has traders and investors biting all of a sudden?

Before we get into the nuts and bolts of BTCs price movements, it’s worth assessing the technical indicators.

  • The 50-day moving average for BTC is $12,709.64, and the 200-day moving average is $8,269.98.
  • At a price of around $34,000, BTC is significantly more expensive than the metrics indicate. As for moving average technical indicators like Bollinger Bands, BTCs performance is equally telling.
  • The upper BB is $35,069.87, the median BB is $18,233.09, and the lower BB is $1396.30. This indicates that BTC has a little more wiggle room for upward growth before it retraces.

bitcoin_chart1

  • If BTC crosses over the upper BB, it will move into overbought territory and ultimately drop in price.
  • Despite recent bullishness, the unprecedented spike peaked at $42,300.00 before falling to its current levels.
  • At current prices, BTC has a market capitalization of around $713B, the highest ever in the history of the world’s premier cryptocurrency.
  • As history suggests, BTCs peaks and troughs are invariably associated with new equilibrium price points at higher levels than before the spike. While it is impossible to accurately forecast BTCs new short-term equilibrium level, it could be midway between September 2020 and January 2021 valuation.

bitcoin_chart2

BTCs applications extend well beyond pure speculation.  Many Bitcoin futures funds are helping to bring in institutional investors, in addition to retail investors. The inclusion of Wall Street brokers is driving up demand for this cryptocurrency.

Bitcoin exchanges like Binance, CoinBene, Xtheta Globa Bidesk, BitZ, and WBF Exchange generate billions of dollars in trading volume.

For those looking for fiat alternatives to Bitcoin payment types, it may be viable checking a wide variety at Mansion Group.

  • This multinational operator features traditional payment methods, including e-Wallets, credit cards, and debit cards.
  • While PayPal’s market cap is significantly less than BTC at $278B, it remains a viable contender for most capitalized payment solution. Visa and Mastercard are on par with BTC at $469B and $347B respectively.

The stress test for BTC is going to be whether it gains mainstream acceptance with e-Commerce operations. Many of the world’s leading operators have yet to make the switch to cryptocurrency. The recent upheaval with Ripple (XRP) with the SEC (Securities Exchange Commission) is likely to ruffle many feathers with company contemplating the adoption of cryptocurrency. In the US, a change of administrations is likely to bring sweeping change to the tax regimen, the Fed, and government policy vis-à-vis cryptocurrency. The nascent industry has already brought significant change to money transfers and value-transfers for customers and businesses alike.

From an investment perspective, BTC-affiliated stocks worth checking out include the likes of NVIDIA, JPMorgan Chase & Co, Overstock.com, Microsoft, and DocuSign.

Each of these companies is heavily invested in development decentralized systems on blockchain technology, and digital assets too.

Even across the tech spectrum there is a move towards commercializing blockchain technology. Since Bitcoin is the face of cryptocurrency, it naturally leads from the front and everything else tends to follow.

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