15 Nov Where’s the bloody bitcoin breakout?
Well, it’s been a heck of a week in the bitcoin market and its only Thursday! As of midday Nov 15, bitcoin (BTC) traded at $5555.46, a 12.8% drop from $6371.74 on Nov 12.
In the same timeframe, Bitcoin Cash (BCH) plunged 19.4% from Nov 13.
We reached out to a panel of experts for a perspective on this pesky volatility problem for everybody’s favorite cryptocurrencies.
What’s driving the bitcoin bender?
Exchange volume has spiked, and social media is lively with discussion and opinion about the upcoming Bitcoin Cash (BCH) and Ethereum forks.
Andy Bromberg, co-founder and president of CoinList, said, “A single event, like a fork, can be a significant factor across wider crypto markets thanks to their relative immaturity. Large holders will often make trades across multiple coins, causing ripple effects beyond the asset that instigated the movement.”
“Volatility ultimately boils down to the basic economic forces of supply, demand, and uncertainty. Uncertainty is what’s driving volume and volatility this time around, just as it did earlier this year with the Aug ’17 BTC fork and the Dec ’17 launch of BTC futures. This rampant volatility validates that there’s still a lot of money behind crypto and that trading infrastructures have improved to handle more flow; we probably won’t see that volume slowing down until the BCH hash war settles,” agrees Danny Kim, Head of Growth at SFOX.
SEC investigations rattle investors
Some analysts are pointing to recent SEC investigations and several high-profile charges and convictions. Others say uncertainty about regulations is a constant contributor to trading volatility.
Bloomberg reported a guilty plea in the SEC’s first ICO fraud conviction of Maksim Zaslavskiy for two ICOs backed by investments in real estate and diamonds that didn’t exist — a scam the US called an “old-fashioned fraud dressed in a new-fashioned label.”
ShapeShift cryptocurrency exchange founder Erik Vorhees, faces an SEC investigation, according to The Wall Street Journal. Investigators are looking into a $50 million cryptocurrency sale by Salt Lending Holdings which loans money to people using their cryptocurrency as collateral. Vorhees was linked to promotions and advice provided to the fundraising sale.
The SEC recently charged EtherDelta cryptocurrency exchange’s founder and assessed nearly $400,000 in penalties. The SEC Enforcement Division’s annual report also highlights successful prosecutions, convictions, and multimillion-dollar settlements.
It’s the technology that matters
Market trading yips aside, it’s the technology that holds most of the promise for the future.
Jimmy Zhong, the co-founder of IOST, remains unconcerned about day-to-day market swings: “The market continues to be unpredictable, the way it has always been. Bitcoin has been declared dead 316 times. This feels like the continuation of a natural cycle, and it’s important to note that even in this turbulence, the blockchain industry is flourishing. We’ve never had as much talent and interest in the space, and the tech has been evolving in leaps and bounds. I try not to concern myself with short-term market volatility, because this space is going to revolutionize nearly every facet of the economy.”
Meanwhile, investors must buckle their seatbelts and hold on tight because a bitcoin breakthrough doesn’t seem imminent.