It’s happened again, folks. After getting our hopes up for the past week, bitcoin is once again trudging through the doldrums of the dreaded $6,000 range, proving that the bears still have control.
For several days, bitcoin was getting investors’ hopes up, and many thought a bull run was back in the swing. After a full month of running its course through $6,000, bitcoin began to show signs of life, jumping by $100 here, $200 there, $300 soon after and so on. Before long, the currency had struck $7,300, giving many people the idea that things were about to look up.
In fact, many analysts were pushing the idea that bitcoin was about to strike gold, claiming that the technical charts were showing long-term bullish trends forming for the father of cryptocurrency, while others stated that bitcoin would enter the five-figure range come November when Bakkt – the cryptocurrency platform by way of the Intercontinental Exchange (ICE) – was set to make its official debut.
This Looks Familiar
But this feels like a real letdown for most hardcore enthusiasts, as it’s estimated the currency has lost as much as 20 percent of its overall value in just the past two days. In addition, this little bull run – if you can even call it that – is even less satisfying than the previous one that occurred in July. At least then the currency was ascending for two weeks and reached the $8,000 range. This time, it only lasted for one week, and the asset struck $7,000 – approximately $1,000 less than what it had graced two months ago.
This is now the second major drop for bitcoin in just over one month, and the currency remains ever-so volatile and vulnerable to outside news. Perhaps the drop stems from a recent announcement made by Wall Street giant Goldman Sachs. After months of touting its upcoming cryptocurrency trading desk, executives have stated that they will refrain from bringing the project to life due to – surprise, surprise – regulatory uncertainty.
Some Feel Betrayed
Many traders feel this is a huge stab in the back and believe the currency’s road to legitimacy will be forever marred granted it doesn’t have the support of mega players like Goldman Sachs. It appears many were relying on the company’s backing and enthusiasm to help draw in further big-time investors, and now that dream is being stopped in its tracks.
Stephen Innes – head of APAC trading with Oanda – states:
“A lot of retail investors’ hopes for a bigger institutional presence were really being driven by Goldman Sachs.”
What Does This Mean?
The situation at hand could argue two things, the first being that large corporations are potentially using bitcoin and cryptocurrency as short-term means of boosting their reputations and appeal to certain crowds. They make announcements that get people’s attention, then dash these announcements to the floor once they’ve received the attention they deserve.
After all, Goldman Sachs isn’t the first company to go back on its statements regarding bitcoin-based plans. Just a few weeks ago, coffee king Starbucks retracted its statements saying that despite the upcoming Bakkt integration, users would not be able to purchase drinks and merchandise with cryptocurrency. Apparently, everyone got something wrong as publicists for the Seattle-based company joked that customers couldn’t purchase a “Frappuccino with bitcoin.”
Not Everything About Crypto Is Fast
But as much as we’d like to lay blame on corporations, the bottom line is that regulation regarding cryptocurrency hasn’t arrived fast enough, and the speed that people demand is not entirely realistic. As cryptocurrency is still a developing medium, new information must be examined not on a monthly or even weekly basis, but on a daily one, and with more being added to the pile regularly, scrutiny is bound to continue before any serious legislation can comes about. Until then, people can expect individuals and businesses alike to remain somewhat skeptical.