Bitcoin's Second Wave
Analysts cryptocurrency market increasingly prefer to remain silent than to give their courageous predictions for 2018. Over the past few months, Bitcoin has more than sprinkled minuses into the ratings of market "nostradamuses," leaving them with a nosedive. However, everyone wants to look into the future of the main cryptocurrency, "at least in one glance. What factors are really affecting the cryptocurrency rate now and is a full recovery of bitcoin possible?
Volatility is the main definition for most digital coins. During the first weeks of February the exchange rate of the main player of the crypto market BTC fell to a deep, though not fatal, bottom, and today is approaching a new psychological barrier of $12 500. In less than two weeks the growth was 90%.
Causes of the fall
To understand whether Bitcoin can rise to its former heights, we need to analyze the facts that influenced its fall. The reasons for BTC's recent drawdown to $6000 are clear. The main factor that steadily squeezes the value of the asset is the regulatory activity of world governments. Let's remember a number of the largest events of the world economy, which pumped up the news background and kept the quotations down:
- China. China is home to a huge number of mining farms, which made the government concerned about the amount of energy consumed and decided to ban the process of mining "digital gold".
- South Korea. One of the first countries to adopt a stronger regulation of cryptocurrency exchanges, with threats to ban them.
- India. Indian authorities found a threat in the very fact of using cryptocurrency as a means of payment, and in early February spread the news about the total restriction of cryptocurrency circulation in the country.
- Thailand. In Thailand, digital money was mistaken as a tool used to finance terrorism, and banks banned all cryptocurrency transactions.
- Japan. The country of the rising sun decided to equate income from cryptocurrency trading with official profits with high taxation. The maximum tax percentage can reach 55% of profit.
The beginning of the second wave
As of February 20, the bitcoin exchange rate exceeded $11 500, and this sudden growth was influenced by the same news background. There were no global event bursts, but in the aggregate, the story develops positively, and the quotes continue to grow:
- Regulation in South Korea has been somewhat relaxed and the government has given the go-ahead for exchanges to operate in the country (albeit with the payment of taxes).
- In Switzerland, some of the tokens were officially equated to securities.
- Major banking organization Bank Of America approved the registration of 45 cryptocurrency patents.
As we can see, the bitcoin exchange rate is directly dependent on sudden news disturbances. Objectively predicting the future of cryptocurrency is really hard, just as hard as predicting the policies of major regulators regarding the asset.
One of the largest crypto-investors and analysts in the field of virtual currencies Tony Weiss suggested one of the most adequate scenarios of Bitcoin rate development in the nearest future. In his opinion, the fantastic figures with the sums of $100,000 the coin will not reach, but the growth up to $25,000 is quite possible. This forecast looks the most plausible, and if it comes true, traders will still have chances to profit from long-term investments and upside play.
In conclusion, we remind you that due to the high volatility and unpredictability of cryptocurrencies, we advise you to thoroughly study the market and the peculiarities of crypto-trading. Increase your education, and take the time to work on trading strategies to minimize risks and make profits. Don't invest all of your money in cryptocurrency, invest exactly as much as you are willing to lose. Try to divide your deposit into several trading instruments to verify risks and increase the probability of profit. Have a successful trading!