171028 Dear Diary, Bitcoin Has Been Remarkably…

Screen Shot 2017-10-28 at 10.05.49 AMDear Diary,
Bitcoin has been remarkably quiet the last couple of days, settling down to $5750.  It’s easy to forget that Bitcoin was as low as $3000 on September 15th just 43 days ago.  It was also at an all-time high of $6137 one week ago today.  That’s been a wild ride nobody quite expected to happen, so suddenly, so fast.  Movement seems to come in waves.  With rumors from China, pronouncements from Russia and a few bitcoin blockchain forks, past, present, and future, its no wonder there have been sweeping changes in attitudes.  A few days or weeks even, of quietude might not be such a bad thing.  It’s no wonder, new owners of bitcoin and owners who suddenly find themselves onto an investment so volatile as bitcoin are beginning to take stock of themselves and their property.  Those who have been watching bitcoin but have chosen to not enter the fray as of yet, also take pause.

Either bitcoin is going higher or bitcoin is fizzling out and diminishing to zero.  I don’t see the latter happening.  There’s just too many good reasons for it to continue and grow.  The only question is whether it will trace a hockey stick chart, launching into the stratosphere sometime soon or going up in a relatively straight line.  Since it hasn’t done anything in the straight line, I’m guessing the hockey stick approach. Over the past year bitcoin has risen steadily but sometimes explosively four or five weeks in a row, then retraces it’s steps for a week or two, and then begins moving higher again.    IF the pattern continues, we should see bitcoin in a holding pattern for the next couple of weeks.

170930 China Will Announce New Cryptocurrency Regulations Oct. 1

China will announce new cryptocurrency regulations October 1, 2017.  That’s very good news for Bitcoin.  Until now, rumor had it, that China was going to ban cryptocurrency altogether. They have already banned ICOs (Initial Coin Offerings) throughout the country.  China was the largest single investor country in Bitcoin prior to the ban.  Japan is now the largest Bitcoin investor country.  Speculation will probably lift the price of Bitcoin prior to Monday.  After we hear what the regulations are its anybody’s guess as to how the Bitcoin community will react.  Needless to say, a positive take on the regulations will give Bitcoin a boost.  A cautious take on the regulations could cause some further hedging.  Ultimately, Bitcoin has to find its supporters and detractors and learn to live within their push and pull.

170923 Interesting Times ($3756)

Jamie Dimon criticized Bitcoin once again yesterday, telling CNBC cryptocurrencies were a “novelty” and said they are “worth nothing.” Soon after, a Swedish company filed a market abuse complaint saying that he knowingly spread false information to influence the marketplace.  Jamie Dimon is not being ignorant about Bitcoin and cryptocurrencies; he knows all too well what Bitcoin will mean for his business.  As head of JPMorgan Chase, Jamie Dimon oversees seven trillion dollars in trade daily.  JP Morgan Chase provides security and ease-of-use for its customers doing that much business each and every day.  Jamie Dimon recognizes that Bitcoin can do the same thing without cost.  Of course he is concerned.

After his first Bitcoin bashing, the price fell from a high of $4325 to a low of $2976 in just a few days.  His statement coupled with the Chinese government announced that they would put a stop to all new cryptocurrency IPO’s and end trading altogether in Bitcoin soon was a double whammy for the Bitcoin marketplace.  Bitcoin soon recovered to a short-term high of $4036 and is now currently at $3756.  There has been no appreciable change in price since Dimon’s second interview.

These are very interesting times for Bitcoin.  Everyone wants to know where Bitcoin will wind up.  Will it take off like a rocket on its way to $10,000 by years’ end and $100,000 by the end of 2018 as some are predicting?  Will it crash and burn as Dimon suggests?  Will the banking industry do what it can to slow the relentless progress and inevitability? The banks are not going to go down without a fight.  You can bet on that.  For the banks, all of the money they invested in getting support for credit card legislation, mortgage loan failures and protections, the bankruptcy laws, Glass-Steagall repeal, and the aftermath of the recession of 2009, means they know how to spend money to get things done  in Congress.  I would not be surprised if the Congress votes to shut down cryptocurrencies as did China.  But it’s actually too late for that.  Japan just voted to make cryptocurrency legal tender.  Countries around the world are already using it.  There have been rumors that Amazon will start accepting Bitcoin by end of October 2017.  The good news is that we’re going to see how this all plays out in short order.

170914 One More Brick in the Foundation

stencil-Brick-Wall-Sq

Unlike other paradigm shifts brought about by technological change, Bitcoin was invented by one person, Satochi Nakamoto, but it thrives all on its own.  Bitcoin has no person(s) or company behind it that rise or fall with Bitcoin success or failure.  It has no government body nor state championing its cause.  There are many people who, at this point, have a vested interest in it, but should it falter, it is Bitcoin’s own intrinsic nature that fosters its survival.  ($3350) Is it time to sell and buy back in at a lower price?  It’s hard to know.  China has just put the brakes on Bitcoin at a time when 25% of the total investment in Bitcoin is by the Chinese.  There are also huge Bitcoin mining operations in China.  So the Chinese would be reluctant to walk away from the technology altogether. But China does not like anything going on within its border that is not under its strict control.

Bitcoin represents one of the finest examples of decentralized, distributed, democratic technologies.  The original Bitcoin design was set up to have a governing body but only to deal with matters of the technology itself.  The governing body, if it can be called that, has nothing to do with politics.  Jamie Dimon is wrong when he says that Bitcoin is a fraud and he will rue the day that he forbid JP Morgan Chase employees from investing in it.

Every day that goes by is one more brick in the foundation of Bitcoin.  There are now so many businesses and people invested in Bitcoin that it would be hard to imagine Bitcoin failing or going away altogether. If you would like to get some inkling of the size of the Bitcoin community today, Google “Bitcoin visualizations”. Since all of the transactions are public through the blockchain, coders take that data and create some beautiful constructions to demonstrate the frequency, size, and geography of the Bitcoin trading community.

170915 Bitcoin Rollercoaster Ride

Steep Climb Yellow Road Sign

Following Jamie Dimon’s statement in which he called Bitcoin a fraud and the Chinese crackdown on new cryptocurrency ICO’s, the price of Bitcoin paused, then went into free fall Thursday night (170915). From Tuesday’s $4354 price Bitcoin fell steadily to last night’s low of $2989, more than a 30% drop.  It seemed that everyone was waiting to see where this would go.  Was Bitcoin broken? Was Jamie Dimon prescient in his condemnation?  Was this the beginning of the end?  True believers, however, were just waiting for a logical entry point to buy more.  Were people selling to get out permanently, or with the intent of buying back in at a lower price?  Where was the army of Bitcoin fanatics who have been screaming since the run-up this summer from $2400 to $4000 that they wish Bitcoin would retrench and give them one last opportunity to invest before it left a vapor trail in its wake into the stratosphere?

Well, Jamie Dimon, it appears, is not calling the shots here.  And, the Chinese will not sit idly by while the rest of the world is profiting mightily with Bitcoin.  Bitcoin, as soon as its prices started to show signs of life, started bidding up again like crazy.  At 2:23 am EST heading-up-a-hill1Bitcoin was $2989.  By 10:00 am EST Bitcoin was $3683.  A 23% recovery.