What future for Bitcoin?

BFI

How high can it go up? Is it too late to invest? Next safe haven or speculative bubble?

Invented by the Japanese Satoshi Nakamoto and limited to 21 million units, Bitcoin is one of many unregulated crypto-currencies operating through the blockchain system (a system that allows transaction blocks to be added to each other knowing that they are encrypted and authenticated).

And to think that at his invention in 2008 this crypto-currency was launched for barely $0.0001… If you were one of the people who invested $100 on the Bitcon from the first day of its release, you would be the proud owner of an $11,000,000,000,000,000 deal on November 29, 2017. Yes, I’ll give you that, it makes you dream. The question everyone is asking is: is it really too late to invest?

Without having to talk about 2008, if you had entered the market on January 1st by buying a single Bitcoin for $971 you would have benefited from a performance of +133%. For information, the global cryptocurrency market has grown from $18 billion to $165 billion in eight months.

However, opinions differ on this new “currency” and two schools have been formed.

The first wave would tend to think that it would be an essential asset in the future and that it would represent a safe haven like gold.
Goldman Sachs has announced in a press release to AFP that it plans to speculate on Bitcoin on behalf of its customers.

The favourable positioning of giants such as Goldman can only give a boost to the virtual currency, which has recently been weakened by China’s offensive to ban market transactions in bitcoins or by the sharp declines probably due to position cuts.

Morgan Stanley’s CEO, for his part, has a more nuanced opinion. Indeed, according to him, Bitcoin is “obviously very speculative but not fundamentally bad”.

The second school is more crying out for a speculative bubble. According to them, all this is just the calm before the storm.

The CEO of JPMorgan Chase is in total opposition to Goldman Sachs. He said in September that he believes Bitcoin will “implode” because it is a “scam”. He even threatened to fire “within a minute” any trader would be tempted to invest in this virtual currency.

Of course, we must take into account the opinion of the famous Warren Buffett, who also sees in it a risk of easy speculation comparable to the 1999 Internet bubble.

Bitcoin is even entering the derivatives market.

Indeed, the Chicago Mercantile Exchange, which is none other than the most important exchange exchange on the futures market, and the CBOE Holding announced at the end of October the very near launch of the cryptocurrency futures contracts. Announcement to who still benefits Bitcoin since following the announcement the Bitcoin has increased by more than 22% since this announcement on 31 October last.

The Nasdaq, the second largest equity market in the United States, is also preparing to launch futures contracts in the first quarter of 2018.

According to some experts, Bitcoin has a high chance of rising to unexpected levels. Ronnie Moas, a reputable Wall Street financial analyst, published a report at the end of July saying that he saw the price of bitcoin rise to $14,000 in 2018, $15,000 to $20,000 by the end of 2020 and $50,000 in 10 years.

Let us not forget that the rule here is the law of supply and demand.

On your marks, ready, trader…

Emilie BOSCOD


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