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Bitcoin may hit Goldman Sachs’ N1.4m/$ mark before December - BUSINESSDAY

AUGUST 11, 2017

Despite the high volatile nature of bitcoin, one thing it has proven over time is that it is not going anywhere down any time soon.

As at the time of writing this article, the price of one bitcoin to dollar was USD3411.45. When you convert that in naira, you have N1,246,032.1. If it continues this way, the world’s number one digital currency is on course to hitting a USD4000 (N1.46 million) price mark set by Goldman Sachs’s analyst Sheba Jafari in July.

On August 1, the long expected bitcoin split or fork eventually took place and the world of cryptocurrency welcomed a new network and token called Bitcoin Cash (BCH). To be sure, most analysts predicted a significant price drop after the split.

But it did not. Instead the price continued to rise.

At the time of the split, the price was at USD2700. However by last weekend, it broke the USD2800 celine and surged beyond the USD3000 high to a new all time high of USD3340 across global exchanges. Bitcoin price has not been above the USD3000 level since June 12.

Following the price increase, the collective market capitalisation rose past the USD50 billion mark for the first time. As at time of writing, the digital currency commands a USD52 billion market capitalisation. Also data from CoinMarketCap showed that the crypto asset class is now worth more than USD117 billion above its previous all time high of USD116.2 set on June 12.

CoinDest further reported that the value of the asset class is up nearly 30 percent over the last week, rising from just under USD90 billion on July 31 and up nearly 80 percent since its recent USD60 billion low on July 16.

As at result of the new valuation, it should be noted that bitcoin is now worth nearly three more times as much as the more traditional store of value.

Reports indicate there may be underhand factors to the increase.

The surge according to report from Cointelegraph is being driven by a deep-pocketed trader or group of traders nicknamed “Spoofy”. Market rumours has it that the trader/traders are manipulating the bitcoin market by employing his namesake tactic on the Bitfinex cryptocurrency exchange.

Spoofy refers to when a trader makes a deceptive bid or offer with the intent of cancelling it before execution, thus giving the illusion that somebody is getting ready to buy or sell and potentially triggering a notable move in price.

MarketWatch said it has happened before like when a British trader named Navinder Sarao was accused of contributing to the 2010 market stock market “flash crash” and he later pleaded guilty to using the shady tactic.

However, analysts that spoke to CNBC point to confidence coming back into the cryptocurrency market.

“If there is something that shakes people’s confidence in crypto then they will sell off. The further we get into this game the less likely you get something like that,” said Ronnie Moas, founder of financial research firm Standpoint Research.

“I think a lot of new investors were waiting on the sidelines until after the hard fork,” said Benjamin Roberts, co-founder and CEO of Citizen Hex. “Now that it has happened with favourite outcome, new fiat money is entering into the space.”

 

FRANK ELEANYA

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