Bitcoin Price Has Dipped… But You Aren’t Getting The Whole Picture

Bitcoin hit a low this weekend.

The price dropped to around US$5,785, the lowest for 2018. At time of writing, it is trading at US$6,149.55.

The sector is taking a beating after hacking reports in cryptocurrency exchanges and government crackdowns surfaced around the world.

There is a lot of doubt surrounding cryptos, a much different sentiment than last year’s euphoria,.

In fact, many are leaving bitcoin for dead.

According to the website 99 bitcoins tracks bitcoin obituaries from around the web, since 2010 bitcoin has already died 319 times…and counting. With almost half of the obituaries (198) happening in 2017 and 2018.

Bitcoin’s price has dropped by almost 70% since its December high…although it is up 137% from this time last year.

Yet, as we wrote before, if you are only looking at bitcoin’s price, you are missing the whole point.

While the mainstream news is focused on reporting price fluctuations, there is a lot going on behind the scenes.

The world is trying to figure out how to deal with this new asset, with cryptos slowly starting to filter into our financial life. Just take a look at some of the news from last week.

Last Tuesday, the St. Louis Federal Reserve bank announced it will start tracking the prices of four different cryptocurrencies. These are bitcoin, bitcoin cash, Ethereum and litecoin.

Battle of the Titans: Who wins when bitcoin and gold head-to-head…and how can you profit? Find out more

The South Korean government is also looking at investing in blockchain development to improve information sharing and efficiency. As reported by Coindesk:

The South Korean government will invest 10 billion Korean won (or [US]$9 million) to support blockchain development in the country, with plans to carry out six pilots using blockchain technology.

With that, the ICT ministry said it will take the lead to work with other government agencies to conduct blockchain pilots in the public sector. The works will focus on livestock supply chain management, customs clearance, online voting, real estate transactions, cross-border e-document distribution and shipping logistics.

This week, the US senate is looking at how cryptocurrency donations could affect elections. This comes after Brian Forde, a former Obama aid, raised almost US$200,000 in cryptos to run in the Southern California election, as Politico reports.

In other news, last week during a US Supreme court case — which is trying to decide if employee stock options represent taxable compensation — the court gave a shout out to bitcoin.

As Business Insider reported:

Justice Stephen Breyer asked the courts about whether it was time to consider a “broader understanding” of what money was.

‘Breyer believes stock options should be considered a taxable form of compensation, and courts should expand their definition of money because:

‘“…perhaps one day employees will be paid in Bitcoin or some other type of cryptocurrency.”

Digging deeper into bitcoin and blockchain

Stanford University launched a new blockchain research centre. As Stanford’s press release details, the new centre is dedicated to ‘researching and understanding a technology that promises to fundamentally change how people and companies make deals and complete financial transactions over the internet.

Or, the fact that Anheuser-Busch InBev — the brewery of Budwiser and Michelob — has launched the first ever blockchain mobile ad campaign. As they recently reported in a press release:

The campaign is built around Kiip’s moments-targeting technology, which is being leveraged by AB InBev to break free of traditional interruptive advertising techniques to better connect with consumers in engaging, meaningful ways…

‘The campaign uses nascent technology, in the form of Kiip’s new “Single Ledger” blockchain product, to address fundamental issues, such as mobile ad fraud. Single Ledger enables all players in mobile ad sales chain to view and audit campaign data directly. The technology allows for simple and clear reconciliation of campaign performance data among all parties, eliminating potential for fraudulent reporting by third parties and ad servers, and streamlining what has historically been a painful, laborious reporting and payment process. In addition, Kiip’s Single Ledger helps AB InBev deliver on its commitment to ensuring every ad dollar is well spent on establishing meaningful connections with consumers in moments that matter, and at the times they are most likely looking to engage with AB InBev’s brands.

And, while many may be losing interest in cryptos, young millionaires are still keen to find out more. As The Globe and Mail reported recently:

More than 70 per cent of millionaires below the age of 40 believe it’s important they receive information on cryptocurrencies from their primary wealth managers, according to a Capgemini survey published on Tuesday. Only 13 per cent of those aged 60 or above viewed such advice as necessary.

And this is just some of the news from last week. There is a lot going on in this space.

Battle of the Titans: Who wins when bitcoin and gold head-to-head…and how can you profit? Find out more

Of course, the path won’t be easy. There is a lot of risk out there, and many new cryptocurrencies will fail.

But next time you hear bitcoin’s price has dipped, dig a bit deeper. You may not be getting the whole picture.


Selva Freigedo,
Editor, Markets & Money

Battle of the Titans: Who wins when bitcoin and gold head-to-head…and how can you profit? Find out more

Selva Freigedo is an analyst with a background in financial economics. Born and raised in Argentina, she has also lived in Brazil, the US and Spain. She has seen economic troubles firsthand, from economic booms to collapses and the ravaging effects of hyperinflation, high unemployment, deposit freezes and debt default. Selva now writes from her vantage point here in Australia. She is lead Editor at the daily e-letter Markets & Money. And every week, she goes through each report and research note produced by our global network of trusted advisors to find the best investment opportunities for you in Australia and overseas. She packages these opportunities for you in Global Investor.

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