Cryptocurrency has brought people’s attention in recent few years and the main reason for the popularity is that Cryptocurrencies were designed to decentralize the authority of central banking systems. Bitcoin is one of the most well-known cryptocurrencies whose transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called a blockchain. Bitcoins are created as a reward for a process known as mining. As nowadays more and more people shop online, Bitcoin becomes more widely accepted by companies to exchange for products, currencies, and services. Just like the exchange rate of other currencies, the price of Bitcoin is relatively volatile.
The price of bitcoin is not only determined by the demand and supply of it but also the investors. In November 2018, the price of Bitcoin hit the new low of the year and lowest price since early October 2017. Its volatility attracts plenty of the researchers to study the price of Bitcoin. Many companies are now accepting Bitcoin payment which signifies the increasing demand for Bitcoins. Bitcoin’s price has suffered setbacks this year especially in November 2018. Instead of returning to the high of $20,000, Bitcoin’s price is constantly falling, and until now it has fallen below $6,000. As bitcoin becomes popular, many companies are trying to develop related services or products to meet the demands of consumers, however, they want to make sure it’s under the legal circumstances.
During the Bitcoin price boom in January, Facebook banned all e-money advertisements to prevent Facebook users from being deceived by fraudulent and misleading advertisements. Recently, Facebook lifted the advertising ban on e-money, allowing some advertisers (such as exchanges) to promote their e-money services. Advertisers approved by Facebook can now advertise, but advertisements that directly promote certain currencies are still banned. Since the end of 2017, the market value of e-money has experienced a sharp rise and fall, with the highest price of Bitcoin approaching $20,000. At that time, the soaring price of e-money caused a craze among consumers.
127 our experts are availableright now
Some of them wanted to make profits through fraudulent advertisements, so Facebook banned the advertising of e-money. Other companies, such as Google, Twitter, and Snapchat, have also banned e-money advertising. But so far, there are still many consumers who are interested in e-money. In order to satisfy these consumers, there are many potential advertisers with promotion needs. As long as Facebook users are not deceived, Facebook is also happy that they can make advertisements. Facebook also shows its interest in the bitcoin market. Earlier this year, the company established its own internal blockchain department to explore the application prospects of this basic technology.
Not only Facebook, PwC, one of the “Big Four”, has begun to accept bitcoin as an encrypted currency for payment. But PwC indicates that Bitcoin payment is currently limited to Hong Kong for consultancy services, and the mainland does not support Bitcoin payments. Coinbase has announced that its trading platform now offers e-gift cards for its customers in the U.S. This means that American users are eligible to spend their cryptocurrency balances to exchange services or products from a dozen of retailers. In order to achieve this development, Coinbase also expanded its partnership with Wegift, which supports many well-known brands such as Nike, Tesco, Uber, Google Play, Ticketmaster and Zalando.
This can be a huge breakthrough since Coinbase encouraged its users to purchase e-gift cards by informing them e-gift cards incurs no withdrawal fees and that bonuses of up to 10 percent. The price of Bitcoin hit the new low in November 2018 which is also the lowest point since early October 2017. This has become the biggest concern for the investors and people are actively compare its price to history’s biggest bubbles — the dot-com bubble of 2000. “The introduction of the Internet triggered a massive wave of speculation, as a result, hundreds of dot-com companies achieved multi-billion dollar valuations as soon as they went public.” However, the bubble crashed shortly with the sharp fall of the index and ultimately triggering a US recession.
The dot comes bubble and bitcoin share a similarity where their prices are both driven to a pretty high point due to speculation and of which led to an artificial inflation in their value. Although they seemly have a similar pattern, market analysts believe it is erroneous to draw a direct comparison between the two. The biggest difference between these two is that the sheer scale of crypto and dot-com businesses are not comparable. Some experts believed that the bubble of bitcoin has not formed yet. Although Bitcoin has suffered its lowest point in 2018, there’s also a groundbreaking news about Bitcoin happened in August. Bitcoin Tracker One which regulated and issued by Sweden began trading in the United States on August 15, 2018.
It has been traded on the Nasdaq Exchange as early as 2015. After first landing in the United States, it is quoted in US dollars with the trading code CXBTF. Bloomberg reports that the ETN is seen as an alternative to the Digital Money Exchange Trading Fund. In recent months, U.S. regulators have either rejected or postponed the decision to list Bitcoin ETF. Ryan Radloff, CEO of Coin Shares Holdings Ltd., the parent company of the above-mentioned ETN issuer, said that all U.S. dollar investors now have access to ETN, previously only Euro or Swedish kronor investors. ‘Given the current regulatory climate in the United States, this is a big victory for Bitcoin.”
Chained App Express has mentioned that in July this year, the co-CEO of Flow Traders, the largest ETF trading company in Europe, revealed that it was expanding its trading products to ETN based on bitcoins and etheric currencies. Many experts suggest that ETN or ETF could provide a way to invest directly in digital currencies such as Bitcoin, and at a lower cost, thus increasing the attractiveness of digital currencies as investment assets. Many experts are trying to forecast the trend and development of Bitcoin. For instance, Trevor Koverko, chief executive of Polymath, who specializes in encrypted digital money technology, believes that “Bitcoin will become a complete payment network.” For now, Bitcoin is used as a means of speculative asset and value storage. However, with the emergence of solutions such as Lightning Network, the use of Bitcoin will increase dramatically along with its price.
Another example of Bitcoin forecasting is that some experts think institutional investors will grow interest on Bitcoin. Mike Potter, chief executive of The Crypto Company, believes that institutional investors will enter the encrypted digital money market by mid-2018. “The lower volatility of Bitcoin will allow other encrypted digital currencies to continue to expand. In addition, we will also see the rise of security symbols in response to increased regulation.” Potter said. In fact, due to the rapid development of virtual currency in the past two years, Morgan Stanley, a big investor, has begun to focus on this area. In its latest report, the agency compared the price trends of Bitcoin and Nasdaq. As of March 2000, Nasdaq’s price had climbed 278% in the previous 519 days, while Bitcoin’s price had only spent a short 35 days, or 248%, hitting an all-time peak of about $19,500 at the beginning of this year.
Just like the comparison many experts made with the “dot-com bubble”, they also compare the price trends of Bitcoin with Nasdaq. After finding some similarities, they also found out the different principles behind these two kinds of assets. Morgan Stanley has reported that, unlike Nasdaq, the decline in the price of Bitcoin is not linear. Bitcoin prices have fallen three times since December. Every time it falls by nearly 50%, it rebounds. But the analyst from Morgan Stanley also points out that historical data are only a small part of the sample, which is only a small part of the variables collected in each bear market, and it is still difficult to predict the current market trend for a long time. To sum up, bitcoins and encrypted currencies will be greatly affected by speculation.
Even with small-scale government development, tradition may affect prices. Most people believe that volatility is normal and does not affect long-term prospects. Experts hope to make predictions in a longer time. More often, it’s the price forecast for Bitcoin in 2020 or the outlook for 10 to 20 years. Although Bitcoin may have limited use cases, it is still the king of all encrypted currencies. This is not a case of ‘which counterfeit currency will surpass Bitcoin’, but how they will impress with their special use cases. In fact, the technology behind Bitcoin is less complex than that behind many other projects, such as ETF. Gradually, Bitcoin would be seen as a store of value, and real money is compared to gold and other assets.
Bitcoin was originally designed as an alternative bank. However, most policymakers and financial experts regard Bitcoin as a store of value rather than a medium of exchange. Last but not least, with the prosperity and development of Bitcoin, regulators will first regulate the ‘first issuance of tokens’ and then directly regulate the encrypted digital currency. However, it is difficult to say whether increased regulation will have a positive or negative impact on the industry. Although the supervision in the field of encrypted digital currency will be strengthened, I do not think that blockchain technology will be hindered by regulation.
