Bitcoin is generally disliked by the financial orthodoxy. Banks do not want cryptocurrencies to
take their place, and there is somewhat of a stigma surrounding it. Bitcoin is the biggest of the
cryptocurrencies, however, it has found itself falling 14% this week after crypto exchange Mt.
Gox has been speculated to soon decrease in value.
Is it as concerning for investors as it sounds? By the sounds of it not really, over the past year it
has increased by about 90%. Furthermore, OANDA analyst Edward Moya has been quoted as
saying, “Bitcoin’s long-term outlook remains bullish,” and has had sixth months of relative
success. Mt. Gox went under in 2014 and recent speculation has arisen following legal
issues, but seems unlikely to send the healthy currency under.
It is the lowest Bitcoin has been since mid-October, but considering the state of the global
economy that is hardly surprising either, with people unwilling to risk investing. This issue is not
isolated to crypto-currencies, as stock markets have also had to cope with the same difficulties, with rising interest rates, inflation and general concerns about economic growth. This is also not isolated to the United Kingdom, but rather the entire globe.
At a Singaporean based crypto trading company, “Stack funds,” one employee has described
the selling pressure as constant. And most of the issues Bitcoin has faced have been primarily
based in Asia, as that is where Mt. Gox operated from prior to closure. Therefore, it is in Asia
that Bitcoin has seen a 1.6% decrease in value, which may hurt some investors, but considering
last week was a record week for the currency, panic seems far away.
I remain unconvinced about Bitcoin and its role in the financial future, but it seems clear that this week has just been a slight downturn, and rather than the currency has discovered increasing levels of confidence. Indeed, its rapid growth over the past year goes to show that perhaps my scepticism is misfounded, although at the same time the erratic ups and downs also suggest I may be right. Only time will tell
Written by Adam Caudle Research compiled by Kristina Njeru