The price of Bitcoin has continued to soar and passed through the psychological barrier of $10,000. Cryptocurrency enthusiasts saw this as a sure sign that it is posed for continuous growth, even after it briefly lost 25% of its value. Adam Back, co-founder and CEO of Blockstream, advised people to sell as little as possible, because “$100k is the next number.” As Bitcoin continues to rise against other international currencies such as the euro and the yen, it is clear that it’s gaining strength on international markets and won’t be stopping any time soon.
People, however, are not quick to cash out and are instead riding out the price increase, expecting to profit from Bitcoin’s Powerball-like price rise. For that purpose, it must be converted to fiat currency. Since all cryptocurrencies are rising in price versus the U.S. dollar, there is little profit that can be made by exchanging Bitcoin for other cryptocurrencies. Profits from Bitcoin’s price rise can only be realized by exchanging it for U.S. dollars at the moment, although a lot of ICOs are looking to change that by offering other tangible assets (such as real estate) in exchange for Bitcoins.
While it is still early to say with certainty if this unprecedented growth is a trend or an aberration, it is becoming apparent that more and more people are turning their eyes to the concept of cryptos and starting to understand the value behind the technology, but also find it very difficult to assign a price to this product. One of the main benefits (and drivers behind its growth) of Bitcoin is its connection to the blockchain – the fabric that is currently redesigning Internet as we know it. As such, it is clear that cryptocurrencies are here to stay and will be an integral part of the IoT as it continues to grow. However, which cryptos will survive and thrive and which will fail is still up for discussion. As total crypto market capitalisation rises, governments and central banks are also starting to take notice. Several major names in the financial investment sector only last week announced they are expanding their offerings to include crypto-backed investment products. Namely, CME Group and MAN AHL have both announced their plans to launch Bitcoin futures and add cryptocurrencies to their investment baskets to increase the range of global benchmark products across all major asset classes.
And it doesn’t stop there. Since November 2016, the CME and Crypto Facilities Ltd., a crypto futures trading platform regulated by the UK’s Financial Conduct Authority that supports currencies Bitcoin and Ripple, have calculated and published the BRR. This aggregates the trade flow of major Bitcoin spot exchanges during a calculation window into the U.S. Dollar price of one Bitcoin as of 4:00 p.m. London time. Earlier this October, Crypto Facilities launched two new cryptocurrency rates in open beta, namely: (1) CF Ripple-Bitcoin Reference Rate (RRR_XBT), a once-a-day reference rate of the Bitcoin price of 1 Ripple; and, (2) CF Ripple-Bitcoin Real Time Index (RRTI_XBT), an instantaneous rate of the US dollar price of 1 Ripple. All of this goes to show that the global demand to buy and sell cryptocurrencies as well as the increasing interest of investors in transparency, price discovery and risk transfer capabilities has created new market possibilities for venturing into the blockchain domain.
So what is the long-term projection for crypto prices – and Bitcoin in particular? Its price has taken off and is breaking ATHs on a daily basis, so there is no reason to be shorting it right now. An interesting development that will affect Bitcoin price is the introduction of Bitcoin futures on the CME.
Despite the recent price rise of Bitcoin, some investors and institutions advise against it being a “speculative bubble” and claim it is unlikely to become a real currency, while Goldman Sachs said the cryptocurrency is not the new gold. This has fuelled a lot of interest in Bitcoin investments with people draining their savings to buy the cryptocurrency in a hope that it will continue increasing its value while others are turning to lucrative lotto games to win just enough money to buy a few Bitcoins. Whatever the future trend for the cryptocurrency may be – it will be exciting to watch it unfold as well as be a part of it.
