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Tag: cryptocurrency

The holidays are a gift for Bitcoin

Consistent with recently observed trends, Bitcoin looks set to receive a boost from the upcoming Christmas holiday, according to a new report from crypto analysis organization SFOX Edge.

In a blog post on Medium, SFOX writes that holidays appear to have an impact on the price of Bitcoin. For example, “After the price of BTC bottomed out at $6515 on Monday, November 25th, it rebounded 20.8% in the following four days, peaking at a price of $7870.35 on Friday, November 29th [the day after Thanksgiving]. The price subsequently fell back to $7344.56 at the time of writing on Monday, December 2nd.”

Likewise, there was a 5 percent rise on 2 September—Labor Day in the United States—while the price jumped 14 percent around the time of 4 July, or Independence Day.

SFOX stops short of reaching any definitive conclusion about the reasons behind the correlation. But it notes that Google searches for “bitcoin” increase around the holidays, particularly in the days leading up to them. SFOX tentatively states the following:

“Just like the expectation of whale movements impacting the crypto market could end up impacting the market, we might be witnessing the crypto market preemptively responding to holidays simply because traders expect the market to move around holidays.

“This would explain why Google searches for ‘bitcoin’ have peaked before recent holidays rather than after recent holidays: market participants could be researching BTC’s position ahead of holidays and then taking long positions in BTC in an expectation of a short-term price increase over the holiday, creating a kind of self-fulfilling prophecy that actually does drive the price of BTC up in the short term.”

At the time of writing, Bitcoin is priced at $7,535. Keep your eyes on that number as the biggest holiday in the West draws nearer.

More investors looking to Bitcoin as markets reel

Last week I blogged about whether Bitcoin and other cryptocurrencies will experience a boom thanks to rising economic instability around the globe triggered in part by the continued trade war between Washington and Beijing. Said war is hurtling forth with no signs of abating; in fact it seems to be picking up steam, regardless of Trump’s decision to suspend additional tariffs, which he did to avoid being branded the President Who Stole Christmas.

In addition to roiling global markets, the Trump’s trade war has many people worrying that a recession in the offing. Predictably, investors are looking for alternatives. Bitcoin is one such alternative due to its independence of geopolitics and the resulting economic consequences. “Because it’s decentralized and not dictated by a single government, it’s not subject to the whims of a central bank or political leader,” Markets Insider reports.

Increasingly, Bitcoin is seeming to investors like a sort of lifeboat in a sea of economic turbulence. Evan Kuo, CEO of Ampleforth, a digital asset protocol, told Markets Insider explained to Market Insider:

“In a slowdown, since the global economy is so interconnected, there are only a limited number of assets that are isolated.”

And at the moment, Bitcoin is as isolated as it gets. Hence, more investors are taking a serious look at it, as well as other cryptocurrencies. The drawback, of course, is crypto’s inherent caprice—as we’ve seen, such currencies are susceptible to wild and unpredictable fluctuations in value. Bitcoin is currently trading at just over $10,500. That could change drastically at any time.

But Kuo says investors shouldn’t let such volatility scare them off.

“It’s helpful that it’s volatile in a way that’s not connected to other assets,” he said. “There’s been almost 10 years of data to suggest that the coin has almost no risk exposure to precious metals, commodities, equities, currencies, and so on.”

With greater risk comes the potential for greater reward, and many investors are increasingly willing to take that risk with regard to Bitcoin. Time will tell whether it pays off.