Over the weekend, primarily because there was nothing else to talk about in the lead up to Christmas Day, the Western financial news media focused on Bitcoin and its apparent inability to recoup last week’s losses.
Although the crypto standard-bearer did manage to stage a meaningful rally off the Friday crash lows below $11,000, some commentators were surprised that it subsequently languished in a range that represented losses of between 20% and 30% from the record highs hit just prior to the launch of CME futures last Sunday.
Of course it’s difficult to know whether anything meaningful can be divined from the price action over the holiday weekend. “The West is what’s causing this selloff,” Mati Greenspan, senior market analyst at Tel Aviv-based online broker eToro, told Bloomberg, noting an uptick in trading in dollars and a downtick in yen volumes.
Whatever the case, Bitcoin did manage to bounce back on Tuesday, rebounding above $16,000 in morning trade.
Meanwhile, Bloomberg’s Stephen Gandel (he writes for Gadfly) was out with a piece on Friday documenting an interview Bloomberg TV did with Fundstrat’s Tom Lee. You can read that piece for yourself, and you can also watch the interview at your leisure, but we did want to point out one thing. Gandel takes Lee up on the idea that Bitcoin’s meteoric rise is justified by transactions and he looks at the value of those transactions as documented extensively on blockchain.info.
“At the start of the year, there were $275 million in daily transactions in bitcoin; earlier this week, that had grown to more than $5 billion,” Gandel writes, adding that the percentage gain there “is more than the rise in bitcoin this year, even before its [recent] tumble.”
Well, we decided to plot the transaction value against the price through yesterday and when we did, here’s what came out:
You can make of that what you will, but if you’re buying Lee’s logic or, perhaps more to the point, if you’re buying Gandel’s take on that logic (because all of this is open to interpretation), that visual doesn’t seem to bode well.
You might want to overlay Google Trends for this one as well for searches on BitCoin. It’s also declining. I’m somewhat bored of BitCoin, and given that everyone (at Christmas) was talking about BitCoin, I think we have reached maximum interest here. It’s not that interesting of an item — and my thought is that we will see lower trading volume, lower interest in Bitcoin, and fewer searches in the years to come.
https://trends.google.com/trends/explore?q=bitcoin
Who other than H will give you that chart. And transaction problems are the main issue.
Not only is it the cost and time of the transaction problems – a problem, but much more so – the fact that only a fraction of a percent of those transactions are for commercial/merchandise purposes (lack of commercial adoption). Which is also a problem for Lightening offering any solution.
That’s the main problem (lack of commercial adoption) related to the lack of a competitive private cryptos future once the speculative mania subsides – which it apparently is – that cryptos are not competitive as an commercial exchange medium, not even close.