Bitcoin Plough on Regardless

Bitcoin has finally shrugged off the volatility in the past weeks to regain some ground and get back to hover around the $4,500 level.

As can be seen from the chart above, it has since fallen back towards the 50 SMA and 21 day EMA markers. This is probably just a minor correction and we will have to watch whether it bounces back off of these averages. The trend is still upwards.

Rather like the news from North Korea, investors are treating news about bitcoin with far less knee-jerk panic than they were before. After digesting the news of China’s crackdown on exchanges and junior miners, as well as the various forks in the next two months, investors realize they have yet to see the sky fall in for bitcoin.

The cryptocurrency detractors like Jamie Dimon only seemed to stall progress slightly, and the emergence of gold-backed cryptocurrencies like ZenGold have helped to soothe investor fears too.

We remain bullish on bitcoin and see it as an emerging star rather than a down-at-heel bit player that now finds itself resting.

The comparison with gold, which seems to be a common way of knocking the validity of cryptocurrencies, is not altogether sound as an argument. Gold has been around as a means of finance for over 7,000 years, cryptocurrencies, in existence for just a few years, have a long way to go before they will be universally accepted as an alternative type of currency.

They have made a good start; and as the technology which safeguards them, develops, people will become more comfortable with using them, making them more widely accepted, and helping their value to increase.

One concern is the number of new miners (or altcoins) coming into the market and diluting the existing pool of cryptocurrency companies.

As this article in Business Insider points out, bitcoin has lost almost half its market share, because of this dilution. This report was done on June 27th – which, by cryptocurrency standards, is ancient history. The figure is likely to be even lower now.

As usual, our take is to watch the market and the charts closely and be prepared to move quickly in either direction.

Noble Gold specializes in IRAs and 401(k) rollovers through precious metals and cryptocurrencies investments.