[Parker] The must-know bitcoin scenario
[Parker’s Crypto Story] The news about cryptocurrency has recently been a hot-potato issue. There are two contrasting perspectives toward cryptocurrency. Some say cryptocurrency has been on the rise while some argue that it is time to sell. In today’s story, the present and future of cryptocurrency will be discussed, mainly based on Bitcoin. #Bitcoin has been strong since October? Since the second half of the year, Bitcoin has been showing similar, but slightly different, development to macroeconomics trends. Until the beginning of October, the price of Bitcoin was likely to go along with the United States stock index. However, since mid-October, it has been showing a different flow to the index. In the fourth quarter of the year, Bitcoin crossed the $11,000 to $19,000 level. During the same period, the Nasdaq only increased by between 11,300 points to 12,500 points. Especially during the mid-October to beginning of November period, when the Nasdaq was on a constant decline, Bitcoin showed the sharpest growth. The gold price, which has been steadily declining since August, is another key factor to be discussed. Gold price is likely to reflect the dollar price. Weakness in the dollar means an increase in the price of gold. However, this flow is also changing recently. Although the dollar has been weakened, the price of gold also stayed low due to the growing hopes of the development of Covid-19 vaccines. Meanwhile, Bitcoin was on the rise. Bloomberg once said, “Wall Street is taking Bitcoin seriously.” This also means that investment institutions started to recognize Bitcoin as “digital gold,” which could be more valuable than gold. #It’s different to three years ago We can't say an asset is valuable if it's not reliable. Until just three years ago, institutions saw Bitcoin negatively in terms of reliability. As Bitcoin could not be used in the real economy, they said Bitcoin is intangible. However, many well-known people now see Bitcoin positively. Big names including Jim Simons, CEO of Renaissance Technologies, Paul Tudor Jones, a founder of Tudor Investment Corporation, and Larry Fink, CEO of BlackRock, have been taking a positive stance on Bitcoin. Many institutions who just started to enter the cryptocurrency market have also been contributing to its rise. #Data indicator for Bitcoin? Data indicators are another key factor in the cryptocurrency market. The indicator includes the investment trend of big cryptocurrency investors, miners’ selling sprees and the amount of cryptocurrency in exchanges. Those are analytical indicators that can show the transaction record in a transparent manner. Ju Ki-young, CEO of CryptoQuant, estimates that Bitcoin is likely to show a decline some time this week. It's because big investors are always likely to keep the Bitcoin that they could not sell at the moment in other wallets, instead of exchanges. Ju, however, also said that although the cryptocurrency market can be seen as overheated now, it is expected to exceed the $20,000 level in the long term.