Bitcoin and Cryptocurrencies Are Back

Bitcoin is trading around $11,000 and other major cryptocurrencies ike ethereum are also up.

There seem to be four major driving factors:
1. The bitcoin price spike was led by India. There has been a bitcoin trading of about $500 premium on the few remaining local exchanges as the government cracks down on internet services such as messaging app Telegram and news aggregator Reddit. The attempt at a crackdown has caused a surge in interest in bitcoin.

2. There is also the FOMO. (Fear of Missing Out). The surge is also a self-perpetuating speculation boom.

3. Facebook is creating the Libra cryptocurrency, a new digital wallet called Calibra, and there are many powerful companies in the Libra Foundation including Visa. This is seen as validation for Bitcoin and the other major cryptcurrencies. There is also the belief that Amazon, Alibaba and other major technology companies could follow Facebook.

4. There is a halvening event coming May 2020. The next bitcoin halvening is expected on May 22 2020 and this means the coin reward for mining new bitcoin blocks will drop from 12.5 bitcoin to 6.25 bitcoin. This will tend to reduce supply of new coins and has historically increased prices in anticipation of each halvening.

4 thoughts on “Bitcoin and Cryptocurrencies Are Back”

  1. Volume can not be interpreted in that way. Actual fx volume surpasses global GDP daily and obviously it’s not the aliens in other planets doing it. Just the whole bitcoin mining halvening process and eventual termination should be enough to look at it seriously.

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  2. This is a “pump and dump” led by the fake Tether coin. If you check the trading volume on coinmarketcap.com, the Tether and Bitcoin volumes are almost the same, and enormous. Tether is supposed to be backed 1 to 1 by dollars, keeping its price stable. But there is no evidence this is happening. So fake Tethers are used to buy Bitcoin, and drive up the price.

    Total crypto trading volume amounts to about 1/3rd of the world’s GDP. Real use of these currencies to buy stuff, even illegal stuff like drugs and hacker ransoms, is orders of magnitude smaller than this. So all this trading activity is just fake volume to pump up interest, and some additional trading by suckers looking to make a buck.

    Disclosure: I made a lot of money off Bitcoin, because I started mining it in 2011, when it was a curiosity, and sold the vast majority in 2017-early 2018, when it was an obvious, classic financial bubble. That was just dumb luck, though, because I got in early. I’m happy to be out entirely, with my gains invested elsewhere, and taxes on the gains paid.

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