Daily Archives: March 6, 2017

Bitcoin (OTCQX:GBTC) is a totally different investment asset type than traditional asset classes. Traditional analysis methods do not applying when forecasting the price of bitcoin. That's why we apply a more fundamental approach in this article in order to come up with a bitcoin price forecast for 2017.

How NOT to forecast a bitcoin price

Most readers would turn to the cryptocurrency blogosphere where they will read ultra-bullish bitcoin price forecasts for 2017 similar to this one from Coindesk. The issue with this approach is that those sites only feature bitcoin enthusiasts and entrepreneurs, so they offer a very biased view.

Traditional financial media, on the other hand, have their classic story telling format. That is not a useful approach either for investors. For instance, CNBC looked at the ongoing stream of articles that compare bitcoin with gold (NYSEARCA:GLD), and concluded that "the comparison is perhaps a positive signal that bitcoin is being commoditized. But bitcoin is not a commodity, while gold has been a commodity for thousands of years." That obviously does not tell anything about the future price of bitcoin.

Fortune.com explained how demand for safe haven assets have fallen since the elections "on a stronger dollar, signs of future interest rate hikes, and potentially business-friendly policies that may arise from the Trump administration. Those potential regulatory changes would raise the chances of higher-yielding stocks." That also is not useful as input for a bitcoin price forecast.

The most interesting headline comes from CNBC: "Bitcoin predicted to rise 165% to $2,000 in 2017 driven by Trump's spending binge and dollar rally."

There is obviously no correlation between the bitcoin price and the dollar or any other regular asset. Large investors simply don't pull money out of currencies, stocks (NYSEARCA:SPY) or gold in order to buy bitcoins.

A legitimate bitcoin forecast for 2017

We believe that a combination of price analysis and fundamental analysis is the most appropriate way to come up with a legitimate bitcoin forecast.

Fundamentally, the bitcoin usage data look great: Usage of bitcoins keeps on increasing, and that is exactly what it fundamentally is all about. Because of the fact that bitcoin is a form of money, the widening acceptance of bitcoin is the most fundamental data point to consider.

According to Statista, bitcoin usage keeps on growing as seen by the number of Bitcoin ATMs, which increased from 538 in January 2016 to 838 by November. Most Bitcoin ATMs, as of July 2016, were located in the United States (345) and Canada (108). The Bitcoin ATMs located in Europe as of June 2016 constituted 24.02 percent of the global ATM market share.

Moreover, several bitcoin charts confirm a growing usage and acceptance:

Last but not least, this research paper on bitcoin's big picture trends identifies 3 marked regimes that have evolved as the bitcoin economy has grown and matured: From an early prototype stage, to a second growth stage populated in large part with "sin" enterprise (i.e., gambling, black markets), to a third stage marked by a sharp progression away from "sin" and toward legitimate enterprises.

In other words, fundamentally, the picture for bitcoin looks very good. This is not only a market for speculators anymore, but one of real users.

We are confident, based on the objective data set outlined above that bitcoin's price rise is not only legitimate, but will continue. That results in a bullish bitcoin price forecast for 2017 and beyond.

From a bitcoin price analysis point of view, the long-term chart (courtesy: Finviz) looks very constructive. Readers should compare the steep rally in 2013 with the steady and solid rise in the last 2 years. As the price of bitcoin took out all-time highs, it suggests it has much more upside potential.

The only 'negative' is that the price rise has accelerated in recent weeks. Investors want to see a steady rise, not a parabolic rise. So we hope there will be a healthy correction sooner rather than later to cool off emotions. Ideally, bitcoin's price corrects to the $1,000 to $1,100 area in the coming weeks.

We could easily see bitcoin's price move to $2,000 in 2017.

This bitcoin price forecast for 2017 originally appeared on InvestingHaven.com

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Read the rest here:
Bitcoin Price Target For 2017 - Seeking Alpha

Sign Up for

Our free email newsletters

A single bitcoin is now worth more than an ounce of gold.

The digital currency crossed that threshold for the first time last Thursday, and at one point on Friday it was trading at $1,292.71 compared to gold at $1,226.89.

Of course, as Quartz noted, "the milestone is inherently arbitrary." If gold was measured by a different unit of weight, its value could be higher or lower. But the symbolism is still significant. An ounce of gold holds a special place in our popular imagination.

And it's an impressive mark for bitcoin to surpass. Back in late 2013, the value of a bitcoin came close to $1,200 but then it crashed spectacularly to $600 in almost no time at all. It briefly stabilized at $800, then it went into a slo-mo slide back to $200 over the course of 2014. Lots of observers wrote off the virtual currency as a failed experiment.

Now bitcoin is back, in defiance of the naysayers. To what do we owe its resurrection? To answer that question, let's go back to bitcoin's beginning.

Bitcoin a highly encrypted form of digital currency was founded on a certain renegade libertarian romanticism. It wasn't controlled by a powerful central government, but by a decentralized network of participants. By 2013, 70 percent of all bitcoin trading went through an exchange called Mt. Gox, founded in Tokyo in 2010 as a way for investors to trade bitcoin for real currencies.

Mt. Gox's CEO, Mark Karpeles, was neck deep in the romanticism of bitcoin. And while Karpeles was, by all accounts, a brilliant software entrepreneur, he also didn't understand the basic security features and best practices your standard financial or software firm uses to protect itself. Sure enough, a massive raid by hackers effectively bankrupted the company in late 2013. That was a huge factor in bitcoin's near-demise.

But the other issue was just that bitcoin was young. Even now, while a bitcoin may be more valuable than an ounce of gold, the amount of economic activity in the world that involves gold is still vastly greater. The total global gold supply adds up to $7 trillion. Bitcoin's total market value is just $20 billion. Bitcoin's smaller economic reach means that the downfall of a massive player like Mt. Gox could torpedo the value of the whole currency.

Bitcoin's resurrection has been more gradual than its initial rise. Bitcoin began bouncing back in mid-2015, and didn't cross the $1,200 threshold until just a few days ago. By contrast, its spike in 2013 from $200 to $1,200 only took a month or two. Today's relatively slower rise is likely a sign that the currency is less a hot new flash in the pan, and actually something gaining credibility with more mainstream institutions.

For instance, there are already exchange traded funds (ETFs) for bitcoin on some financial markets. These instruments allow investors to buy bitcoins without going through the tech-savvy rigamarole of maintaining their own bitcoin account. They just invest their money in the ETF, and the fund handles the rest. Later this month, the Securities and Exchange Commission is expected to make a decision whether such on ETF can be sold on the American financial markets.

Another factor in bitcoin's resurrection: the geopolitical turmoil created by Brexit and Donald Trump. Chaos and unrest particularly when it has an anti-elitist, populist bent drives rich people to panic and look for a safe place to stash their money. Gold-standard style investments like bitcoin (or, well, gold) can be pretty attractive to wealthy individuals who worry that currencies backed by governments might become increasingly unreliable when the government is headed by an erratic know-nothing.

But there's yet another factor in bitcoin's resurrection: And it has nothing to do with the virtual currency as a libertarian stateless alternative.

There's also bitcoin the technology, which pioneered the blockchain as a method of digital record-keeping. This is the innovation that allows everyone using bitcoin to agree on how much currency each user has and what transactions they've undertaken all without any centralized financial system keeping track of things.

That innovation has lots of traditional industries and investors pretty excited. Wall Street is an obvious candidate for adopting blockchain technology. But its potential applications are far wider. As the BBC pointed out, you could imagine something as mundane as dentists using blockchain to maintain medical records. A lot of the enthusiasm driving up bitcoin's value is enthusiasm for bitcoin's technology, not its currency.

Under pressure to expand its reach, will bitcoin give up its renegade libertarian ways? Or will mainstream industries and players just copycat the blockchain technology, leaving bitcoin a boutique investment for well-to-do survivalists? Only time will tell.

See original here:
The rise and fall and rise of bitcoin - The Week Magazine

By Parke Shall

Those that read us know that we have been Bitcoin bulls for quite some time. With the price of 1BTC now approaching $1300, the question of whether or not we are staying in or cashing out has come up several times.

We wanted to write today to inform readers that not only are we staying long bitcoin, but we will, as we have been saying in the past, continue to add small amounts on any dips. We had a short term bitcoin price target of new all-time highs for this year that we reiterated in a previous article out in December 2016. In December of 2016, with bitcoin at $800, we stated that "Bitcoin Would Soar Through $1200 in 2017".

Now, it is time for us to focus on our multiple year long-term outlook for bitcoin. We don't believe that $5000 or even $10,000 is out of the question eventually, though it may take many years for the digital currency to reach that point. Needless to say, we remain bullish.

We know that bitcoin is becoming more and more of a news item over the last couple of weeks, as its price has run up significantly to now over $1200 per BTC. Anytime there's a price movement in any type of security like this, it makes the news. Many times, when penny stocks or other lesser-known securities rise in value, the media covers them without adequate understanding of what they are and how they work. Bitcoin is no different.

It has been getting more and more media coverage this past week yet the media, for some reason, continues to want to compare the price of one BTC to 1 ounce of gold. Yes, it is true that bitcoin has passed 1 ounce of gold in value. What does this mean? Absolutely nothing.

As bitcoin bulls, we would love to sit here and give you some convoluted meaningless answer as to why the price of one bitcoin passing 1 ounce of gold is meaningful, but there is really no common denominator basis of comparison between the two. You can put gold and silver on a ratio because you can reduce both metals to weight. You can't put bitcoin on a ratio with gold because one is a physical item with weight and a somewhat unknown but relatively finite supply and the other is a digital product that exists only online or in cyberspace.

So if you are a member of the financial media and are reading this, stop comparing the price of gold with the price of bitcoin.

Moving on, we could spend many paragraphs and many pages defending bitcoin as a storer of value. We could also, as generally Austrian thinking economists, make the argument that it has no value because it doesn't really exist. We think the answer for the short term is going to be somewhere in between. It exists because people are buying into it (not unlike Federal Reserve notes). It is a storer of value because it is limited in its supply. We have maintained in many of our articles that the major risk to bitcoin is the fact that it exists on an infrastructure that must be in place in order for it to be transacted. Whereas one person can go and hand gold to another person if the entire infrastructure of the world is brought down, bitcoin doesn't exist without our smartphones, our computers, and the Internet.

With this all said, we have written many articles over the last year talking about why would be buying the dip in bitcoin at various circumstances. After the Bitfinex crash, we came out and said that we would be buyers and after that, we wrote that we thought the digital currency was going to easily eclipse $1000 and then move through new highs. So far we have been right on.

Now let's talk about our outlook for the future. Despite bitcoin being incorrectly compared with gold, it continues to come up as both a hedge and a storer of value. Well you can take dispute with either of these, it is quite obvious that the public believes both of these to be appropriate. We do as well. Like any other financial asset that is in demand, it doesn't really matter what the ultimate product is, it only matters what the demand for said product is.

With the big banks and even the central banks working on different ways to incorporate the Blockchain into their business, it is obvious there has been buy-in on a major scale for a bitcoin. Many have argued that other digital currency's may come and take the place of bit coin and we actually believe just the opposite. We believe that because bitcoin was the original digital currency that it is going to have the most staying power and legacy status for many years to come. Other digital currencies may gain value on the fact that bitcoin has value, but there's only going to be one bitcoin at the end of the day.

In a world that is increasingly switching to digital, it is going to be tougher and tougher to make a case against bitcoin as long as large banks and governments continue to buy into the technology. There is no doubt that the blockchain technology is going to be the next step for a number of corporations and potentially a number of governments.

Investors need to realize that 100% of capital is at risk when they are dealing in such a speculative asset with very little track record behind it. With that said, we believe the bitcoin is going to remain in demand, become further accessible to retail spiking demand, and will have its credibility continue to improve going forward. While there are a varying group of long term estimated price ranges for bitcoin between $0 dollars and $1 million per bitcoin, depending on how seriously it is taken as a hedge against the financial system, we certainly don't think that the digital currency is going to stop growing in value anytime soon.

Over the course of its lifetime, we believe bitcoin is still in its extreme infancy and we would not be surprised to see the price eclipse $2000 by the end of the year this year. Further, our long-term targets for BTC remain between $2000 and $5000 for the next year or two. At this point, we may see corrections and we may see some stagnation but ultimately the most important point is that in the finite amount of supply and growing demand are going to continue to push prices much higher in the future. We remain long bitcoin.

Disclosure: I am/we are long BITCOIN.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Visit link:
We Love Bitcoin, But Stop Comparing It To Gold - Seeking Alpha

The soaring gains made by bitcoin in its latest bullish run in 2017 has seen the cryptocurrencys market capitalization now exceed $20 billion for the first time in its history.

Bitcoins price rally and a few stumbles have already seen a dramatic year for the cryptocurrency, less than 3 months in. At the time of publishing, bitcoin is trading at $1,279, $20 away from its all-time high of $1,298 set on Friday, March 3, 2017.

Accordingly, current figures from CoinMarketCap reveals that a total of 109,320 bitcoins traded in a 24-hour period. With approximately 16.2 million bitcoins currently mined and in circulation, the worlds most prominent and valuable cryptocurrency is now valued at a little over $20.6 billion.

Pitting bitcoin against the worlds M1 (liquid money metric) scale on the CIA global list, the cryptocurrency is up a few places to reside at #66 in the rankings, now ahead of Bulgaria and Cuba and below Lithuania.

Bitcoin has now gained over a third in in market capitalization since the last week of 2016, a year which saw the cryptocurrency double in price over the year. The cryptocurrency crossed the $15 billion mark on December 28 last year as price pushed toward the $1,000 milestone.

Having begun the year above the $1,000 mark, bitcoins market cap hit $17.5 billion, before the bullish run hit a brick wall after intervention by Chinas central bank which began investigating bitcoin exchanges in the country. Bitcoin has since persevered. free from theinfluence of the PBOC as Chinese traders took to alternative platforms.

On March 2nd, bitcoin surpassed parity with gold, a milestone for the cryptocurrency that is quickly being regarded as a store of value for investors around the world. Bitcoins gains have led to a positive trend among other cryptocurrencies. Ethereum, the second largest cryptocurrency after bitcoin, is nearing a market cap of $2 billion. Dash, third in the list after Bitcoin and Ethereum hit an all-time high market cap of $329 million the same day bitcoin announced it was more valuable than gold.

For a live Bitcoin Price chart, clickhere.

Image from Shutterstock. Charts from BitcoinWisdom and CoinMarketCap.

Go here to read the rest:
Bitcoin Exceeds $20 Billion in Market Cap - CryptoCoinsNews