That's why the 2018 Bitcoin could still fluctuate | 07/16/18

In recent days and weeks, it has been relatively quiet around the main cryptocurrency Bitcoin. However, with this relaxation phase, it could suddenly be over. Four reasons explain the volatility of the second half of the year:

Unexpected highs of $ 20,000 per Bitcoin at the end of 2017 and the collapse that followed shaped the international cryptographic community. With such a roller coaster ride, the Bitcoin disqualified for the sake of more conservative investors, but by no means lost its appeal as a portfolio mix for risky investors.

Investors Sniff Entry Opportunities

For example, the current valuation level is again tempting some investors to hide. Because bullish investors now assume that the consolidation phase of the last few months could reverse in an upward trend. After price losses of about 60% in the first half of 2018, such a recovery is conceivable.

Hope Through the Seasonal Cycle

Especially in the past three years, Bitcoin has seen extraordinary price gains, especially in the second half of the year. For example, the price of bitcoin rose by 75% between July and December 2015. Still in 2016, crypto-currency in the lead has risen by around 45%, especially during this period. During the peak year of 2017, Bitcoin even recorded price increases of more than 450% between July and December. Regardless of these seasonal trends, the following three arguments speak of a volatile second half of Bitcoin, and may be heavily trading-oriented.

Bitcoin is not a security

The SEC's recent decision not to classify Bitcoin and Ethereum as titles has been hailed as a major success on the crypto scene. As a result, the two largest crypto currencies continue to be outside the jurisdiction of the US Securities and Exchange Commission. However, this rule currently only applies to Bitcoin and Ethereum. It is not known yet if other cryptocurrencies can be classified in the same way.

Despite this positive decision, Bitcoin investors must continue to expect stricter rules in the future because regulators remain very skeptical about the entire digital currency market. Such an uncertain environment is a major obstacle for institutional investors in particular because they can only build larger crypto-positions if the security of planning is absolute.

New applications for Bitcoin

In addition to the regulatory concerns of investors, the skepticism of the population towards Bitcoin is also a factor that increases the price increases. Despite the great media attention and the hype of cryptocurrency, Bitcoin is only a small class of secondary investment. However, the proliferation of blockchain-based applications and cases of use of digital currency in the real world could dramatically extend the reach of Bitcoin.

Currently, Bitcoin is still considered a mere speculative asset rather than an existing means of payment. It's hardly surprising that true Bitcoin fans complain that most digital thalers are bought for speculative reasons and not for their inherent benefits. New cases of use of blockchain technology, which can be materialized quickly and thus demonstrate the added value of digital currency, could give Bitcoin a new luster in the future.

Hackers Bond Investors

Despite the many positive signals, Bitcoin suffers from its public perception. Security issues raised by hackers and crooks have disrupted many users. Reports of looted crypto-currency deposits and others have shaken investor confidence in the long run. For example, the recent attack of hackers against the South Korean Bithumb stock market led to a price collapse of about 12%. Thieves have captured bitcoins worth nearly $ 30 million.

However, such attacks are not isolated isolated cases, undermining the confidence of crypto investors. Experts estimate that "in April 2018, a total of about $ 670 million in cryptocurrency assets were stolen by professional hacker gangs. Although Bitcoin itself is considered indestructible, the ecosystem in which the corner is located, far from it. If such machinations can not be avoided in the future, the Digtalwährungen will not establish itself in the mainstream.

Pierre Bonnet / finanzen.ch