Bitcoin's Price Hike and the Future

July 19, 2018

Anyone who pays attention to the volatile cryptocurrency markets is likely aware that the price of Bitcoin, and by extension, most altcoins, has risen handsomely in the last few days. This is cause for celebration for those that hold cryptocurrencies. No doubt talk of lambos and private islands will rise to the forefront of discussion boards, with the dark days of the last month or so quickly forgotten. Also, there have assuredly been some to make a killing in the futures market recently, or some lucky folks that went all-in on BTC during the recent downturn and who have already seen a nice turnaround. Make no mistake: we are nowhere near the all-time-high on Bitcoin; rather, this is just a sort of nice uptick for those invested (perhaps heavily) in cryptocurrencies after a multi-month long losing market.

But what exactly is causing this recent price hike? The bell has been tolling for cryptocurrencies in general for half a year now. What could be driving the price up in this grim time?

There is no one single cause of the uptick, of course. Cryptocurrency is almost entirely a speculative market, and just about anything could cause prices to surge or dive unpredictably. However, there is one notable driver of positive speculation, at least here in the US: The CBOE has filed an aplication with the SEC that, if it is aproved, could result in the creation of a Bitcoin ETF. Those history buffs out there will recall that a similar scheme was attempted by the Winklevoss twins last year, and the hype around that drove Bitcoin to new heights in the early summer (before it crashed, but we don't talk about that). The details have been discussed ad nauseum elswhere (for a good summary, read BitocinMagazine's coverage from earlier this month), but the important thing to keep in mind is that the SEC will render it's decision on this issue on August 10th. With that info in mind, it seems sensible to assume that this upcoming SEC ruling is one of the forces that is propelling the market upward.

So what is one to do with this information? Well, I am not in any position to give advice to anyone about what to do with their money. Nothing in this article should be misconstrued as financial advice, nor should I be taken as endorsing any actions or entities with regards to cryptocurrency. Buyer Beware, basically. However, it seems to me that one of two things could happen in the SEC Bitcoin ETF case: either it gets approved, or it doesn't. In the case of the former, the best thing one could do would be to horde Bitcoins beforehand, anticipating a major price climb. However, in the latter case, what might happen is that a so-called "flash-sell" could occur. A flash-sell is a very quick, sudden downturn to an extremely low price-point in a market, perhaps over the course of just a few seconds. In this case, the winners are those with buy orders at or near that bottom point, who were able to buy something (in this case, a cryptocurrency) at a very attractive premium. Flash-sells often result in a rapid recovery to a higher low-point that becomes more stable. So, maybe now would be a good time to put in some very optimistic buy orders on exchanges and sit on them for a few weeks.

To anyone reading this article, if I have made any mistakes with my information, please let me know and I will correct it. The info in this article is based on my understanding and research. I have traded in and worked with cryptocurrencies of various kinds for over a year, but I would never vernture to call myself an expert on the subject. These are just some interesting thoughts that I have been mulling around and wanted to share. Let me know what you think of them!