At press time, bitcoin is trading for over $13,000, and the rally just keeps on going. Many traders and enthusiasts are looking at the granddaddy of cryptocurrency with a bit of confusion. After all, this isn’t the first time the currency has enjoyed such a serious rise to the top, but the last time ended in serious pratfalls that caused the currency to lose nearly 80 percent of its value in less than a year.
Will Bitcoin Repeat Its 2018 Results, or Will Things Be Different?
Naturally, there are some concerns regarding the future of bitcoin. Will the asset plunge into darkness as it did during 2018, or will this bull rally be different somehow? What can traders and crypto fans expect in the coming months?
According to one source, this bull rally is supported more by market trends, suggesting the currency’s latest behavior has a thicker backbone that the one that occurred in 2017. As we all likely remember, bitcoin struck its all-time high of nearly $20,000 during the latter half of that year, though serious drops in its price began to occur during the first few weeks of 2018.
It later emerged from a report issued by John Griffin – a finance professor – that bitcoin’s alleged ties with tether were what did the currency in. In what basically turned out to be a case of “fraud 101,” the report stated that many industry players had been using tether to purchase bitcoin whenever the asset fell by even a small or minimal margin. This worked to potentially tie the coin to USD – as tether is a stable currency – and boost its price enough to instill market mania and frequent bull surges that inspired more and more people to buy.
Mati Greenspan, a senior analyst at cryptocurrency exchange e-Toro, explains in an interview:
The first time that bitcoin breached this level to the upside was in a frenzy of fear-of-missing-out (FOMO), as most of the world was just learning what this new digital asset is all about. This time, however, the rise seems much more sustainable and the currency price more justifiable given the current levels of awareness and adoption.
Indeed, education regarding bitcoin and cryptocurrencies in general is up, while companies like Flexa are working to make it easier for retailers and merchants to accept bitcoin and its altcoin cousins as legitimate means of payment. Thus, the goals of cryptocurrencies are coming to fruition, while individuals no longer view digital assets as purely speculative.
Who Prefers Crypto Over Traditional Assets?
Still, bitcoin remains largely popular with specific types of audiences, mainly younger generations and millennials. George Michalopoulos, a portfolio manager with Typhon Capital Management in Chicago, Illinois, explains:
Traditional market participants may be more skeptical of [bitcoin] than millennial day traders.