Bitcoin – From Chaos to Millpond

It’s been quite a year for the cryptomarket, with the bulls and the bears fighting it out for supremacy following the highs of late 2017 and the lows of this year.

Those who were fortunate enough to enter the market in the early days, now considered to be whales, may well be wondering what’s happened to the cryptomarket and Bitcoin in particular, with volatility falling off a cliff as the year progresses, the rare spike the only reminder to investors that there is still some life in the trailblazer that peaked at just shy of $20,000.

In Crypto years, a year is a particularly long time when considering the market’s youth, but for investors and especially traders who moved across from the more mature asset classes of currencies, commodities and even equities, in search of that volatility, the recent millpond environment will certainly be perplexing, particularly when eyeing the volatility currently being seen across the very asset classes that were shunned earlier in the year and late last year.

Traders in search of volatility through day trading are certainly not the type of investors that the broader cryptomarket needs for growth in market cap, with the lack of volatility reflected in recent trading volumes that have been on the slide.

Whether volatility will return and the day traders stick it out remains to be seen, some would have likely crossed back over the divide into the mature asset classes that have certainly found some vim as geo-political risk rains down over the global financial markets.

What’s next for Bitcoin and the broader market remains to be seen, but when considering the influences of governments and regulators on the direction of the major cryptos, one has to consider the SEC’s pending decision on the 9 Bitcoin ETF applications as key to growth for Bitcoin and the broader cryptomarket.

If valuations begin to recover, the herd will return and with it the dizzying heights of last year’s prices, but if the SEC decides to reject the applications, there’s not much reason for the herd to return, at least not until the G20 and the Financial Action Task Force (“FATF”) deliver their first set of rules and regulations for the cryptomarket.

One concern will be over the fact that the G20 had pencilled in a November rollout. The FATF announced last week that their first set of rules and regulations on money laundering won’t be out until next summer, which begs the question of whether the SEC will sit tight and delay any pending decisions until there is a more structured regulatory environment.

Hacking, price manipulation and fraudulent activity are certainly issues that need to be addressed before governments and regulators, the SEC in particular, will be willing and able to allow institutional money to roll in.

Looking at Bitcoin this morning and direction in recent months, the chart says it all.

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