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Bitcoin approaches worst week


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

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