Bitcoin is the leading cryptocurrency of the world in terms of market capitalization and its price volatility often affect the direction of the entire crypto world. Just as the hopes of bitcoin’s bull run was dwindling in the past few weeks with the digital asset consolidating around the price of $10,000, bitcoin has risen back and at the time of writing, bitcoin price is standing at $11,757.
Such a huge price movement in just a span of a day shows what speculative nature can do to an asset. Since there is no physical backing, bitcoin’s price is not bound with any real-world commodity. The price spike has sent the crypto twitter into a frenzy and here is what is being said right now.
If Bitcoin can post more than just a wick above the $11,760 resistance it’s a clean run in to $12k.
Ports of call beyond there would be:
— Dom Prince (@DomPrince_) August 5, 2019
Amid the FOMO (fear of missing out) that is building up as a result of this price spike, the co-founder of Morgan Creek Digital and the well-known host of the cryptocurrency-related podcast, Anthony Pompliano, has a message for everyone entering the crypto world.
Important message as we enter the next Bitcoin bull market:
– BTC is very volatile
– You can lose all of your money
– Only invest what is ok to lose
– Twitter is not investment advice
– Don’t buy BTC with credit cards
– Keep low time preference
– Do your own research
— Pomp 🌪 (@APompliano) August 5, 2019
While the major reason for recent price uptick is difficult to pinpoint, it can be attributed to the recent U.S.-China trade war and protests in the streets of Hong Kong. Some are suggesting that amid the trade war, people are taking their money out of China and mainly through the purchasing of bitcoin.
This increased influx of money into the bitcoin ecosystem have just propelled the demand based on simple supply-and-demand market principles. But still, it is hard to highlight one sole factor because the price of bitcoin is based on pure speculation. The entire ecosystem is internet-based and there is no physical reflection of bitcoin in the real world. Price swings thus are a norm in this internet and speculation-based ecosystem.
Price manipulation is also an important factor to point out amid this price spike. The market capitalization of bitcoin and other cryptocurrencies is very low as compared to major financial institutions. Big whales present in the market often take advantage of the asset’s volatile nature by pumping and dumping the asset in the market in bulk. But as the ecosystem is getting more mature and healthy with increased adoption, it is being hoped that this issue will be tackled as well along with the regulation one.
The end of 2017 saw bitcoin touch its highest value ever of almost $20,000. 2019 is also expected to witness at least somewhat of a bull-run as witnessed in 2017 because the ecosystem is more developed now. Global adoption is on the rise.
Since the recent spike is too big, it might not be the result of just a simple pump-and-dump. The bull run has already been in the works since the past few months. Hashrate of the bitcoin network has risen to new highs as more than $3 billion is being settled in daily bitcoin transactions. Big global companies like Facebook have started adopting the technology of blockchain. Lawmakers are finally shifting their focus on regulating this burgeoning space. The halving event is expected to occur next year which will cut the rewards in half. Intellectual capital from all over the globe is pouring into crypto.
All of these factors are contributing to building an ecosystem where a bull-run can thrive. With bitcoin rushing upward, it now remains to be seen whether it will be able to cross its all-time high price this year or will it just be another random spike followed by months of bearish behavior. The bitcoin world is too volatile and expecting even the distant of scenarios isn’t all wrong here.