The price of Bitcoin stands around $340 as we begin our weekly review, down around $40 from where it was a week ago. And I’d say that that is, surprisingly, a pretty positive sign, given what occurred over this week. Much of the news was positive, with some good little tidbits here and there.
But there’s an elephant in the room. An invisible elephant, one could say.
The SEC has sent letters of investigation to many prominent Bitcoin companies, and the letters contain gag orders. As a result, while we know the letters exist – gag orders have never been completely able to stop leaks, after all – we don’t know how many were sent out. We also don’t know what, exactly, the SEC is claiming the issue is. These could just be investigations, but they could instead be the beginnings of prosecutions. This could be the start of the crackdown, even. This news has rippled through the community by now – but it’s pretty serious stuff. Markets hate uncertainty, and a massive investigation is exactly the sort of thing that will keep the market from regaining its optimism.
But it hasn’t completely prevented it. Yes, the price dropped, but it refused to drop TOO far. We’ve still managed to hover $50 or more above the year-long low. I’d suggest that while the SEC news is scary and pretty big, the market is showing some real resilience by not retesting the $300 price point. Time will tell if we retest it before moving upwards, but to many observers it seems as though this $330-$340 range has set itself up as a new bottom – at least for now. As the SEC story develops, expect it to be impactful. New information that makes it appear prosecutorial rather than precautionary in nature could really hurt market confidence, at least in theory. Any more neutral news will likely see a price rise due to an increase in certainty.
But what about the other cryptomarkets?
Litecoin had a good week relative to BTC, heading up around 8% from our last check-in. This was partially spurred by the BTC/USD price drop, but could also be seen as the end of Litecoin’s rather long downtrend, which appears to finally be abating, at least somewhat. Litecoin seems to continue picking up some steam, with the biggest story leading it being, in my view, GoCoin’s adoption metrics. GoCoin is a payment processor like Coinbase or BitPay, but they work with Litecoin and Dogecoin to allow merchant acceptance as well. It’s exciting to see them continue to onboard merchants, and the fact that they work with LTC and DOGE are some of the biggest reasons to view those coins as good investments.
Speaking of DOGE, after its almost parabolic recent rise, it has managed to remain steady at the 70 satoshi area, a promising development. Price stability after a distinct rise is rare, but also very impressive – it shows that even at a time when a large number of people want to be cashing out (as people love to sell right after a price increase) demand is sufficient to keep the price steady.
Last question (and the one to which I am able to provide the least accurate answer): where are we headed?
The BTC/USD price is the most uncertain, but it seems poised for a dramatic rise if no further bad news hits. LTC/BTC is likely to move downwards and then resume some upward momentum if and when that happens. DOGE/BTC is likely to dip and then resume some upward momentum as well, spurred by renewed community optimism. In all, despite the SEC situation, I think the mood in cryptocurrency markets is moving distinctly more bullish. With historically low price points currently available and the beginnings of a surge of newcomers (check Google trends, for instance), we may see the flash bubbles of yesteryear return rather soon. With everything in place, this is an exciting time for crypto – although, to be fair, when is it not?