Bitcoin Under 10K, Where Is It Headed Next? · 71 Republic


Spencer Kellogg | By Spencer Kellogg

After an early August surge that saw Bitcoin top $12,500 per coin, the cryptocurrency has fallen sharply over the past 24 hours, sinking below $10,000 on major cryptocurrency exchanges across the world.

And this time, there doesn’t appear to be any institutional money there to brace its fall.

As the Dow Jones Industrial Average fell 3% during the Wednesday trading session, Bitcoin responded in a similar fashion wiping away tens of millions of dollars of its market cap. Between mounting trade wars that have begun to cool the global economy, civil rights flashpoints in Hong Kong, and continued riots in France, Bitcoin’s price has struggled to maintain it’s parabolic advance since early January.

Even without the burnt-out public squares of Paris and the Chinese government amassing troops along the border of Hong Kong, Bitcoin has been rocked by its own troubles. While the recent spike in price has brought some favorable press coverage, the media has rightfully been more skeptical of Bitcoin and cryptocurrency than it was in November of 2017 when it acted as an excited cheerleader for a sport it did not completely understand.

Allegations have lingered throughout the spring and summer months that suggest much of the global cryptocurrency trading volume is fake. What’s worse are the growing whispers surrounding the stablecoin Tether, its dealings with Bitfinex, and its alleged use in the type of fraud and manipulation that would make the president of the Federal Reserve blush.

None of which even cuts at the core of the major issue at hand which is that Bitcoin, as a currency, kind of sucks. Take this interesting brief from the Russia-China border that says Tether, not Bitcoin, is the coin of choice for high volume trade. Residents there said they like the stability of Tether’s value and prefer it to Bitcoin which can swing wildly from day-to-day.

Throughout its young life, Bitcoin has acted as a unique hedge against the hyperinflation of currencies and sharp recessions of major global and national economies. When Greece and Spain struggled in the earlier part of the decade, some analysts speculated that Bitcoin could replace the Euro altogether. Sweet dreams!

However, the debate about Bitcoin as a currency has dwarfed its most interesting prospects. If Bitcoin can simply fill the void as a sharp piece of code that acts as a digital store of value, then the asset class should mature organically at its own pace and still become a profitable and valuable commodity to hold.

The sort of adoption needed and ‘true’ volume expected simply doesn’t exist in the ecosystem today. Though many companies and self-important economists have gotten on board in the past year, the average person you run into every day has never bought Bitcoin and their eyes glaze over at the mere mention of it.

Regardless of the present circumstances, Bitcoin has proven itself a resilient asset. In the long run, Bitcoin looks sure to have some sort of seat at the global financial table (even if it is simply as a nuisance). Until then though, the road will be bumpy and feature major volatility due to the global systems it was built to compete with.

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