The first two weeks of 2017 will go down in Bitcoin history. Bitcoin reached a high of $1161 exciting Bitcoiners everywhere as well as mainstream media such as Bloomberg, BBC, CNBC. Bitcoin in the spotlight and no doubt pricked the interest of many who still do not know what Bitcoin is.
Just as we were wondering when this massive bull run was going to slow down, the ball finally dropped. On the 5 January, Bitcoin price fell by 20%. The sudden drop could be related to the Chinese Central bank propping up the weakening Chinese yuan. It is noted that Bitcoin rises when the Yuan falls and vice versa. The yuan posted one of its biggest rises on record on Thursday due to strong economic data.
Bitcoin prices began to consolidate around $920 until 11 January. News from China emerged that the People’s Bank of China had embarked on a week long investigation into the Bitcoin Exchanges in the region. They will carry out site inspections on January 17 to check whether enterprises dealing in bitcoin have the correct licenses, implemented anti-money laundering systems and whether there is market manipulation. This news of regulation triggered panic amongst traders and the price dipped to lower $770 levels.
“It’s tough to make predictions, especially when they are about the future – so said the infamous Yogi Berra. But it’s a new year and the price of bitcoin has been volatile, so it’s a good time to look at what the future may hold for the digital currency.
In the long run, the financial revolution that was started by bitcoin will yield a better, faster and stronger financial system but over the next year there are three things that I view as high probability events for bitcoin.
- Bitcoin will go back to being a currency
- Bitcoin will become a new asset class for investors
- Bitcoin will become a hedge for global currency turmoil
Bitcoin was designed as an alternative currency, similar to gold but infinitely more usable due to its digital nature. Gold has a long history as a currency, but try buying booking a hotel room at Expedia with an ounce of gold…it is impossible. But not with bitcoin. In fact, I have booked hotel rooms with bitcoin on Expdeia and found it to be easier and more secure than my credit cards. A few clicks of a button and my bitcoin was transferred, I did not need to provide personal information that could be hacked. My credit card remained securely in my wallet.” Brian Kelly / CNBC Read why the panic sellers are wrong about Bitcoin
Watch this short video from CNBC – Bitcoin falls 10% as China plans to investigate exchanges:-
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