Will Bitcoin recover?
Although it’s already April, the sun is shining and temperatures are rising, it seems like Bitcoin is still stuck in cloudy February, with unpredictable forecasts and sudden chills. The price of Bitcoin is currently around $6,500, with some analysts predicting a further drop to 2018 lows, seen in February. According to a pessimistic estimate, a further drop to $5,400 is also possible, although everyone agrees that it will be short-lived. On the other hand, a clear break above $7,000 could signal a new climb, with the first resistance around $7,500.
Beset from all sides by non-believers, Bitcoin now seems much less like the godlike force it once was, and more like a feverish senior waiting for a ray of sunshine. Emboldened by Bitcoin’s current state, ghosts of the past have come creeping out from the shadows, adding to the gathering clouds above the crypto mountaintop.
The former CEO of Mt. Gox, Mark Karpeles, joined them on Wednesday. He started a surprise Reddit AMA and shared his opinions on everything Bitcoin and crypto-related. He was pretty negative when it comes to cryptocurrencies in general. He said that the technology is here to stay, but that Bitcoin may have trouble keeping up. When it comes to Ethereum, he said that it was too untested and immature to go anywhere. Although his opinion is still held in high regard by many, his skepticism may be interpreted as bitter disappointment. After Mt. Gox went bankrupt, he spent time in jail, losing 77 pounds, and his wife left him. Pretty grim, sure, but he may actually receive approx. $1 billion in crypto when all is said and done. He said that he would give it all back to Mt. Gox’s many creditors, hoping to clear his name after being accused of stealing the exchange’s money for personal use. He did say that he was looking for closure rather than forgiveness.
Bitcoin’s overnight drop may have been caused by Karpeles’ comments, although there were certainly other contributing factors, as well. For starters, Capital Economics, an investment research firm from London, discovered that the price of BTC has been very closely related to S&P 500 ever since it started falling from record highs in December. However, the firm said that the factors that dictate the price of BTC and stock prices are very different. Stocks have been affected by trade war fears, while the price of BTC has suffered due to crypto ads bans and increased regulation. The firm concluded that Bitcoin is essentially worthless, saying that it will certainly fare worse than the stock market in general.
However, the big thing that very few news outlets are talking about is the detrimental move by India’s central bank. The Reserve Bank of India issued an outright ban on banks allowing people to transfer funds into BTC wallets. Although India is not a huge market for crypto, the move added one more drop into the already overflowing cup of fear and doubt.
In spite of all that, investors are still investing in Bitcoin and cryptocurrency startups. One of them, Chainalysis, announced on Thursday that it has raised $16 million in a Series A round. The company is one of the hottest new crypto companies, a pioneer in the business of crypto tracking. Although its key role is to lift the veil on anonymity and find out who the crooks are, Chainalysis’ success proves that people are still looking at ways to make money in the crypto space. While some are happy to feast on the corpses of Mt. Gox and thrive on the desire for control, others are likely patiently awaiting Bitcoin’s second coming, when it should cast aside all doubters with a strong, confident hand.