bitcoin price

Last week bitcoin hit an all time high of $7447 last week, and has shown no signs of dropping below the $7000 mark.  Year to date, the  cryptocurrency has appreciated by over 500%. While some analysts have remained sceptical about the currency, others remain bullish about its long term  prospects.  Here are a few factors behind the recent jump:

Big money is coming in

The move by the CME to start trading in bitcoin futures by year end means hedge funds and investment banks will pump more funds into bitcoin and cryptocurrency markets as a whole.  Large fund  managers, have been angling to get into the markets in view of the fantastic returns made in the last few months. At a market capitalization of $200 billion, cryptocurrencies still lag behind other asset classes, suggesting significant upside remains.

Volumes in emerging markets are also on the rise. N1.5 billion worth of bitcoin was traded in Nigeria last week, a significant increase from the N386 million traded in the first week of the year.

User adoption is growing

Critics of bitcoin, have often cited the lack of a retail use, as one reason why it may not last for the long haul. That however is slowly changing. Coinbase, one of the largest cryptocurrency exchanges in the United States, has deepened the use of Shift, its debit card. Shift allows users to make transactions using bitcoin, which is then converted to fiat (regular) money.  Several other services exist and are currently fine tuning their operations.

Should one Buy/Sell/Hold  ?

Conventional wisdom would be to cash out, especially if an investment has returned over 500% year to date.  Buy side analysts however, have predicted that bitcoin could hit $10,000 before year end.  Cryptocurrency markets are an emerging one riddled with volatility and uncertainty. Only invest what you can afford to lose.

 

Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training. He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE). He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time, he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy. You can contact him via onome.ohwovoriole@nairametrics.com

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.