[photo public domain: http://apttus.com/blog/academy-the-rocketship/]
The last two weeks have seen the price of bitcoin and many alternative cryptocurrencies skyrocket in value. As these digital assets continue to appeal to the appetites of speculators, one must ask the question, “Why now? What is driving such strong demand?"
Moving Away From the US Dollar
It appears that it isn’t just the cryptos moving higher. Oil, gold, silver and other commodities are rising as the US dollar is weakening. To be fair, cryptocurrencies seemed to be the initiator of the move and now other assets are following suit.
Are Large Institutions & Banks Driving Cryptos Higher?
Unlike most people, I applauded the decision by the SEC to deny the bitcoin ETF back in March of this year. Yes the bitcoin price took a hit in the aftermath, but it was short lived. Having Wall Street firms speculate on bitcoin via paper contracts would have most likely given them the opportunity to game the system and reduce the true price discovery mechanism we currently enjoy.
For governments or large financial institutions to game the current market (referring to bitcoin here) they are forced to enter the market and purchase bitcoin directly. If banks are indeed doing this, this may be the result of the exploding prices we are witnessing, not for just bitcoin, but all other cryptocurrencies in general. Since banks have almost unlimited resources, and with the help of global central banks ability to print money, it shouldn’t come as any surprise that this could be exactly what is beginning to occur.
It has been a mere 10 days since the WannaCry ransomware disrupted thousands of computer systems worldwide demanding payment in bitcoin. Since governments and no central authority can hinder bitcoin transactions, do you not find it odd to see such a surge in demand? This could be, in my opinion, an effort by large global players creating the great ‘pump ‘n dump’ needed to drive fear into the hearts of everyone considering digital currencies.
If this is a ‘pump ‘n dump’, and billions are lost globally, you can be rest assured that the people will demand, “Government, please do something!!”
I believe bitcoin, steem and other good cryptocurrency have come to stay, truly we have pump and dump cryptos out there so i advice we trade wisely. Bitcoin and other cryptocurrencies are still gonna go higher cos they faster , cheap and easier to do business with.
Whether through pump and dump or profit taking a fall in price is always possible, as long as I see higher highs and lower lows I am not worried about the price, I see this as a decade long speculation.
Yes, I intend to be a long term holder of BTC. There isn't too many alts out there that I find as attractive.
I guess we'll have to just wait and see what happens to the bitcoin price over the next few weeks. As it soars, it's definitely going to be back in the MSM again.
The last thing anyone buying crypto should do is ask the government for help. That's like putting the fox in charge of the hen house!
Lol...absolutely. Thanks for posting @silverbug. :)