The price of Bitcoin has stabilized around $4,600 heading into mid-September 2017. At a market cap of $71.3 billion, Bitcoin has seen a dramatic surge in trading activity in recent weeks. The world’s favourite cryptocurrency is rallying on the back of growing uncertainty in geopolitical affairs. Rising tensions with North Korea vis-à-vis ballistic missiles testing is driving traders towards digital currencies like BTC.
The total volume of daily transactions numbers some 277,000 with an estimated money supply in the region of 16.5 million BTC currently in the market. Recently, Bitcoin rallied spectacularly to an all-time high when it spiked above $5,000, but just as quickly it retreated towards the mid-$4,000 range.
Is there Bubble Wrap on Bitcoin?
Since the global financial markets largely have checks and balances in place to prevent bubbles from forming, many traders are looking to alternative investments like Bitcoin to seek their fortune. True to form, the technology behind the blockchain peer-to-peer system is fantastic. Trades are easy to process, guaranteed secure, and they are processed instantly.
Given the widespread acceptance of Bitcoin among trading platforms, banks, e-commerce sites and retailers it comes as no surprise that it is gaining in popularity. The price of Bitcoin is not dependent on underlying assets and BTC is not backed by central banks. This means that its exchange rate can fluctuate wildly, and this is precisely what happens from day-to-day. Between December 2013 and December 2016, the price of BTC hovered around the $800 – $900 price range, however its explosive growth gained traction in 2017.
What Do Trading Experts Believe about BTCs Growth Prospects?
Several naysayers have likened the Bitcoin surge to the trading in tulips that took place many years ago. However, this digital currency is backed by more than just its attractiveness as a novelty. The blockchain technology that encompasses BTC, ETH, LTE, and some 900 other cryptocurrencies is viable on multiple levels. BTC is exceptionally volatile, and the pricing of this digital currency reflects as much.
Wilkins Finance cryptocurrency strategist, Gerald Levitt believes that there is plenty of sustainability in digital currencies: ‘Everybody is always looking for the next big thing, and for several years it has been sitting right under our noses. That the world decided to take notice in March 2017 is significant, but this is not when BTC got its start. The widespread adoption of digital currency trading, and now a growing market for derivatives trading of digital currency is indicative of the interest we are seeing in this new-age technology.’
Recently, the market capitalisation of Bitcoin hit $76.4 billion, Bitcoin Cash was inching towards $11 billion, while the world’s #2 most traded cryptocurrency Ethereum recorded a market capitalisation of $30.9 billion. In all cases, the meteoric growth of digital currency trading is unprecedented. The total value of all 900+ digital currencies is closing in on $170 billion dollars, as global interest surges. Even with the rising costs involved, traders who are toying with the question – what is Bitcoin mining – realise that it is far more lucrative to trade the cryptocurrency than to purchase expensive hardware and mine BTC today.
A recent sell-off took place in China after the Chinese government banned initial coin offerings of BTC. The long-term prospects of digital currency are bullish, as evidenced by the net long contracts on the currency, despite short-term pullbacks. Analysts have mixed opinions of where BTC is headed, but some believe that it could hit a quarter-million dollars by 2027. The main cryptocurrency to watch however is Ethereum which has surged in recent months. With a market cap of $30.9 billion, the yield on Ethereum outstrips that of BTC by a long margin.