Happy All-Time High Anniversary!
Bitcoin hit its all-time high a year and a day ago. On December 17th, 2017 the OG cryptocurrency briefly tickled the underbelly of $20,000 USD. With most crypto news outlets publishing anniversary stories, we thought we’d wait a day to soak up the occasion and reflect on what the future might bring–as well as wheel out another gem from our favorite economist.
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Bitcoin All-Time High Hits 20K, FOMO Surged
When bitcoin hit the $20,000 mark, it was up almost a whopping 2,000 percent for the year. The spread of FOMO was severe and the subsequent prolonged bear market bitcoin has suffered prompted the ridiculous ‘bitcoin infection’ analysis produced by Barclays Bank in New York.
Led by Joseph Abate, the team of analysts released the following analogy, which compared cryptocurrencies to infectious diseases:
“As more of the population become asset holders, the share of the population available to become new buyers — the potential ‘host’ population — falls, while the share of the population that are potential sellers (‘recoveries’) increases. Eventually, this leads to a plateauing of prices, and progressively, as random shocks to the larger supply population push up the ratio of sellers to buyers, prices begin to fall. That induces speculative selling pressure as price declines are projected forward exponentially.”
He may yet have proven right, though, in his thesis that “the speculative froth phase of cryptocurrency investment — and perhaps peak prices — may have passed.”
I wonder what he made of the iPod in the mid-noughties–a product the surging popularity of which was only halted by Apple’s next-gen product, the iPhone.
Where To From Here?
Infectious disease or nascent technology, bitcoin’s path from here is far from clear. Bulls point to the imminent launch of the Bakkt exchange in January, which should usher in institutional money and custody-driven demand.
Clayton may yet allow an ETF to be launched, though his incapacity to present a consistent and coherent message continues to be a drag on the cryptoeconomy. Only recently, the regulator has warned that there will be no bitcoin ETF while there remains evidence of market manipulation.
A frustrated Cboe, SolidX, and VanEck consortium pointed out to the commission in a presentation that they had allowed the listing of the Breakwave Dry Bulk Shipping ETF, a fund designed to offer investors exposure to daily changes in the price of dry bulk freight futures. It is a product, they argued, that was ripe for manipulation.
Some Like it In The Gutter
There are those who enjoy wallowing in the pain of others. With bitcoin now hovering around the $3,500-$4,000 mark, esteemed bubble-buster Nouriel Roubini celebrated the demise of bitcoin in a typically spiteful tweet from the classy NYU professor:
Is is a coincidence that each time the shitcoiners start insulting me here, Bitcoin & all shitcoins collapse in price? Now BTCdown 5% to below $3200. So please bring it on & shot yourselves in the foot. And pile on more shitcoin manure as you dig deeper in that shitcoin cesspool
— Nouriel Roubini (@Nouriel) December 14, 2018
At Bitsonline, we felt a reflection of the all-time high anniversary would simply not be complete without a dose of grammatically disastrous Roubinian drivel.
Have your say. As it greets its all-time high anniversary, where to now for bitcoin?
Images via Pixabay