Businesses such as the Fair Go Casino and individuals who rely on bitcoin are anxiously waiting to see whether the signs, which point to a resurgence in the value of the cyber currency, will bear out. Bitcoin has been dropping steadily over the last six months but indications point to a resurgence in the value of the coin.
In early February the value of a bitcoin was a little over $3,400 but over the course of the last month, the bitcoin’s value increased 11% and now stands at $3,800. At one point during the month, the value of the bitcoin came close to $4000 but that seems to have been a momentary high and most analysts feel that if it stays at $3,800, it will indicate stability.
Bitcoin Rallies
Bitcoin’s rally comes in the wake of good news for the cryptocurrency. Tech industry heavy-weights have been giving positive reviews regarding bitcoin’s future and stability. For months bitcoin seemed to be trapped in a bear market. Now there are indications that the cyber currency is set to turn a corner and its price could start moving upward.
In December 2017 the bitcoin price peaked at $20,000, but over the course of 2018, the currency lost 80% of its value. Now data shows a new bull run is on its way. The bitcoin 50-week moving average has dropped below the 100-week moving average for the first time since April 2015.
Over the last few weeks, bitcoin bulls have been out in force, making predictions about how high the price could climb and talking up developments. Jesse Lund, vice president of blockchain and digital currencies for IBM, said that he expects the value of each bitcoin to reach over $5,000 before the end of the year. He thinks that eventually, each coin could be worth over $1 million. That would mean one Satoshi (0.00000001 bitcoin) on value parity with the U.S. penny.
Banking Support
Some of the bitcoin rally can be attributed to Julius Bär, a respected and venerable Swiss Bank which announced that it plans to start offering a range of new digital assets for its clients.
Another boost came from the U.S. stock exchange Nasdaq which added two new digital currency price indexes for both ethereum and bitcoin in preparation for the exchange’s upcoming bitcoin and crypto trading futures.
Signs of a Bull Run
Some analysts say that the root of last year’s bitcoin decline can be traced to the last bitcoin bull run in 2017 when the bitcoin price shot up to almost $20,000 from a low of $1,000. The last 12 months have seen almost $400 billion in value wiped from the cryptocurrency market due, many analysts say, to banks’ hesitancy to enter the cryptocurrency market.
Now that the value of bitcoin is inching up, institutional involvement in bitcoin and other cyber currencies could be just around the corner. According to Greenspan, “It looks likely that, within the next few months, every portfolio manager in the world will have easy access to trade on and invest in bitcoin, ethereum, and other crypto-assets.”
Some bitcoin traders and investors are anticipating the Bakkt bitcoin platform and a U.S. bitcoin exchange-traded fund to boost the price of bitcoins. The Bakkt bitcoin platform plans to offer bitcoin futures trading and to open bitcoin and other cryptocurrencies to a wider retail market. This development is dependent on an ongoing U.S. Securities and Exchange Commission investigation over potential price manipulation and banking officials want to see what will happen with that before they join in.
Bitcoins and Banks
Can bitcoin replace traditional bank accounts? That scenario is one step closer to reality with the launch of two bitcoin and ethereum accounts by crypto lending platform BlockFi. The launch follows a private beta in which the accounts attracted over $10 million in deposits from corporate, institutional and retail crypto investors.
The 6.2% interest rate being offered was a big attraction in encouraging the investors. Interest will be paid in either ethereum’s ether or bitcoin, depending on the account deposits. This makes the account most appealing to those who are interested in building up a bitcoin or Ethereum portfolio.
Last year BlockFi raised $58 million in a series of funding rounds. The lending platform has long sought to establish itself as crypto investors’ financial services “go-to provider.” The lender has plans to launch a portfolio line of credit and crypto-backed credit card. It is presently making loans from $2,000 against bitcoin, ethereum or litecoin at a 4.5% interest rate. BlockFi chief executive Zac Prince said “BlockFi is the first crypto challenger bank. It has though been pushed on by institutional interest over the last year or so.”
Gemini exchange will provide custody of the accounts which will be secured by digital asset insurance coverage. Bitcoin or ether interest-bearing accounts with BlockFi will make funds available to account holders to withdraw at any time.
Optimism
The 2017 bitcoin bull run can be attributed to investors’ expectations of bank and institutional support for the cryptocurrency. When that support failed to materialize, the value of the coins fell. Now, investors and crypto traders are hoping that the Bakkt bitcoin platform and institutional investment from the world’s biggest financial services companies and banks will return the cryptocurrency market to its 2017 zenith.