Has Bitcoin Found the Bottom Amid the Current Market Turmoil?
The Winklevoss brothers may be the most relaxed and reassuring faces of bitcoin right now, but their confidence might also be rewarded sooner rather than later. Bitcoin has fallen over a period of turbulent months, from a high of almost $20,000 to its current price of $8,295 at the time of writing.
Although predictions in late January 2018 were perhaps a little premature, the currency now appears to be recovering. The bull is there, although he’s been grazing in meadows, not chasing bears as he was supposed to do over the last three weeks. It would seem, however, that sentiment really will push bitcoin back up in 2018, but this time probably with a wary eye on the volatility that went before.
Bitcoin’s Core Value as a Cryptocurrency is Shining Through
Bitcoin’s reputation as a heart-breaker with desperate mood swings has shifted completely over the last two weeks. Against the backdrop of losses all-round in global markets, Bitcoin has undergone a makeover, and the price is telling. From a low of $5,922 on January 6, 2018, it has fought its way back to just under $10,000.
This alone is a remarkable journey for any asset. It would appear that not only has bitcoin survived the dip and left, it also has a new respectability. There was carnage on both the Dow Jones Industrial Average and the S&P 500 indexes this week, both falling more than five percent and resetting the clock for many investors.
The Winklevoss brothers made headlines recently when Tyler Winklevoss went on record as saying that, right now, bitcoin represents a “buying opportunity.”
Speaking from the recent MENA Summit in Abu Dhabi, his voice now seems a prophetic measure of considered calm in the dip before the climb. It seems he was spot on, as a bullish ambling is discernible in the price of bitcoin since January 6, 2018. Investors are buying back in, bringing with them an insistence on a more stable, measured climb.
That this is happening against a current overall slump in the altcoin market makes it even more promising. The bad headlines of recent weeks, where Southeast Asia brought either tight regulation or outright bans of virtual currencies into play, are now over.
The recent US Senate hearing on February 6, 2018, where the approach of “do no harm” towards cryptocurrencies was affirmed by US regulators, has spurred renewed optimism in bitcoin and the wider cryptocurrency market. A new playing field is emerging, and former voices of hope from mid-January 2018 that lauded the price plunge now seem positively prophetic too.
Remarkably, bitcoin is emerging as a valuable, safe and climbing asset in comparison with the concurrent melee in global equities, although caution remains the watchword for the immediate future.
From Pariah to a Safe Haven?
A rebound of 53 percent is nothing to scoff at, something bitcoin achieved since its low of February 6, 2018. This is a rallying cry, coming as it does against the backdrop of investors showing a strong risk aversion, with short US Treasuries also booming as stockholders seek security.
Bitcoiners point to the fact that the cryptocurrency cannot be correlated with or measured against the broad market. The decentralized nature of the currency remains free of banking and other market woes. The reality is that it has far outperformed the fortunes of US equities and this is a strong, bullish upswing. From a dip below $6,000, it has climbed steadily, and although dramatic, the previous price slumps seem not to have been any kind of bubble popping, despite notable commentators’ observations on the matter.
A slow and steady climb is what should define bitcoin now. This is in stark contrast to the background of the biggest jump ever recorded on the Chicago Board Options Exchange Volatility Index. While the recent S&P 500 sell-off has been a dark moment, the leading cryptocurrency is silently clawing its way back to its former promise.