Bitcoin slumped more than 8% on Friday. After almost 15 months of losses and stagnation, Bitcoin has made a miraculous recovery rising more than 150% from its lowest point in December 2018. In its heydays, Bitcoin had surpassed $10,000 in early December 2017, before briefly crossing the $20,000 mark for a single day on December 17th 2017. A year later, the digital currency had fallen back to Earth, dropping below $3,200.

Several investment pundits had written off the future potential of Bitcoin and other digital currencies. Since most big countries had either banned or refused to recognise the currency, there was little scope. But, the ardent believers of currency are keeping the faith. The price of Bitcoin has surged to nearly $8,200 earlier this week, which is more than double the value from the start of this year. There are several speculative theories floating for this spectacular rise, including US-China Trade War & growing institutional interest which resulted in more retailers beginning to accept the crypto currency.

Bitcoin lost nearly 21 billion dollars in value in just 24 hours. The reason for this declines was stated be Mass-sell order on BITSTAMP exchange. This drop is being seen as an opportunity for investor who missed out on its previous bull run or could be construed as warning for more falls.

The reactions to this rise has been mixed with quite a few Crypto analyst & traders betting big its acceleration. One prominent venture capitalist believes that despite some short-term choppiness, over a long-time frame, the markets are still in a clear uptrend & the improved fundamental conditions of the crypto markets will help propel them back towards their all-time-highs in 2019.

However, not all are bullish about future of Cryptos. Many refuse to recognise them as legal tender, and therefore don’t wish to risk on something that is illegal. Also, technical chartists have analysed that there exists a positive correlation between BTC and S&P 500 during the S&P correction phase. Therefore, when S&P 500 falls, Bitcoin also falls. However this relationship doesn’t exist when S&P rises. Rather, it may work against Bitcoin momentum as some investors may chose to exit Bitcoin and enter rising S&P 500.

Whatever may be the trend forwards, Bitcoin has been adding lot of spice to otherwise boring financial markets. Let us see if it gets hotter & spicier !!











By Abhay Gupta

With background in e-commerce and IT, Abhay manages operations and backend processes at SAKSHAM Wealth. He is a data cruncher and his expertise with MS Excel helps the team in research.

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