Cryptomarkets Week In Review, November 30, 2014

Note: My colleague, Ben Isgur, is on leave. I’ll be filling in for the time being.

This week’s been a relatively quiet one for Bitcoin – the price hovered roughly between $350 and $400 for the duration of the week, continuing a period of relative stability – the longest since the precipitous decline which began in August. This increasing trend for stability may be bad news for those who bought in at the peak of the bubble, but it is good news for the currency’s role as a reliable store of value.

The week ended on a high note, with a substantial jump in price to the current high of just under $380 starting on Bitcoin Black Friday, which seems to have gone well, with a number of retailers participating (including the American Red Cross). The price declined significantly following the announcement back on the 18th that the US marshals will be auctioning off another 50,000 BTC (currently a $19 million value) from the Silk Road seizure. It did, however, rally significantly afterwards, probably in part due to the surge of Changetip tipping (including a record-setting 10,000 tip day), something that helped to raise some positive publicity.

Where the price goes from here is an open question: the trend has been towards these periods of relative stability lasting longer and longer, but it does seem probable that the price is still above the stability point in terms of Bitcoin commerce, so it’s likely that there are more drops coming in the future: it’s simply a question of when. Until then, we may see some gentle growth fueled by the publicity of tipping and generally increased confidence in the market. As the early generation of Bitcoin traders leave the market, and more experienced traders and robots become involved in the market and follow more rational investment strategies, the radical ups and downs of the market will continue to become milder and less frequent.