In the last month, bitcoin continued its rise, from $763 to a high of $1,153 yesterday.
Then it fell dramatically on Thursday to a low of $953 on Coindesk and has since been hovering in the $1,000 area.
All of this comes just days after the 8th anniversary of the first piece of the blockchain, known as bitcoin’s “Genesis Block” which was mined by the pseudonym known as Satoshi Nakamoto on the 3rd of January, 2009.
According to Coindesk, yesterday the aggregate exchange price average across the major USD denominated exchanges hit a high of $1,153.02, which is just shy of the all time high of $1,242 USD on November 28th 2013 recorded on the Japanese exchange Mt.Gox. Those price levels were sustained for around 12 days, but users never had the ability to withdraw any of those gains.
Bitcoin's price movement is such that it is now within striking distance of Gold’s spot price, currently at $1,179. With the currency at $1,100 per unit yesterday that translated to a market cap of $17.6 Billion or 470 metric tons of gold.
The Danish, Saxo Bank, reassured Bitcoin holders by saying that 2017’s increase will be around 165%. According to Saxo, it will be a year marked by a Donald Trump “spending binge”.
As of December the Saxo Bank price forecast stands at $2100. The bank says it arrived at this price prediction based on Trump’s plan to ramp up spending on infrastructure. This will take place in conjunction with more Federal Reserve rate hikes this year which taken together will cause the already rising dollar to “hit the moon”.
We don’t agree with their analysis on the US dollar, but do think much higher levels for bitcoin could be soon ahead.
Part of what has been driving the current price movement in bitcoin can be attributed to China’s increasingly stringent and restrictive capital controls. For instance, the Chinese are only allowed to withdraw $50,000 USD in foreign currency and there are other measures to stop outbound capital flow via corporate acquisitions and investments.
The Chinese government claims, as governments often do, that this is to protect the integrity of their currency - the yuan - which depreciated almost 6 per cent against the dollar in 2016.
Many Chinese choose to use their $50,000 withdrawal limit as early as possible in the year and that certainly could have provided the major boost to bitcoin we’ve seen lately.
If you want to see how many bitcoins are flooding into China, check out fiatleak.com where they show real time bitcoin transactions. If you watch during the evening on any day of the week you can see nearly every bitcoin being purchased flowing into China.
And, interestingly, the high, just before today’s major pullback, in Chinese Yuan on one Chinese exchange was 8,888. The Chinese love the number eight.
The most striking story though is Mexico where their currency has lost over half its value against the US dollar since 2008. This has caused a massive influx in demand plus soaring premiums for bitcoin on the nation’s two largest exchanges Bitso and Volabit.
The Mexican peso is the 18th most-trade currency for bitcoin today and the price for bitcoin yesterday on the Bitso exchange hit a staggering high of 27,949.00 pesos. That’s the equivalent of $1303.24 USD - more than a 13% premium over the US aggregate exchange average.
For those who felt bad because they had not bought bitcoin during its price rise since 2013, this pullback may offer you the chance to get back in at cheaper prices. For more information on how to get into bitcoin and access to our book, Bitcoin Basics, click here.
And if you really want to be at the epicenter of the cryptocurrency revolution, make sure to attend Anarchapulco, where the entire final day of the conference is called Cryptopulco and has all the biggest names, investors and entrepreneurs in the Crypto space attending.
This post has been ranked within the top 25 most undervalued posts in the first half of Jan 06. We estimate that this post is undervalued by $7.55 as compared to a scenario in which every voter had an equal say.
See the full rankings and details in The Daily Tribune: Jan 06 - Part I. You can also read about some of our methodology, data analysis and technical details in our initial post.
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I'm surprised ....... actually what's the strong reason behind this massive increase & then decrease......... bubbles burst ?
This btc bubble certainly got people excited and I expect some made a nice profit. I'm not buying as I just don't have the funds to speculate, but I still follow what's going on out of interest
damn. I hurried to sell the part, when it was 950$
I belive, that one day it'll cost 3000$ ))
!cheetah ban
They are already banned!
Remaining BULLISH on BITCOIN. Upvoted and tweeted. Thanks again as always for sharing. Stephen
Disclaimer: I am just a bot trying to be helpful.
DV,
You misspelled rolled-over ;)
I'll call a classic head and shoulders shaping up, pattern fully revealed around 2020. (next moon cycle)
How many people gave a Bitcoin or part thereof as a Christmas present? Just a thought!
I have been asking whether there is a futures market - do you know of any crypto-exotics - it would be an interesting market - any direction would be gratefully received!
I like a good pull back to get in on, I even more like the take off in price to the up when I bought on lower prices. I am a member of TDV, and I listen and learn :)
Good report Jeff!
The yesterdays drop of Bitcoin was also around 888 USD but it was only for 1 or 2 Minutes and now you cant see in the charts. The drop today was also in the area of 880 to 890 USD.
The eights are also in USD prices ;-)
I believe this area is bottom of the fall.
Last chance to get 1BTC for 3 digit USD ?!! ;-)