Bitcoin has had a tough year in 2018, with the prices at their all-time low. But now things seem to have changed, and the prices are spiralling at $14,000, which is considered its fair value. Cryptocurrency expert Thomas Lee, who is also the Managing Partner and the head of research at independent research boutique Fundstrat Global Advisor analyzed that there are a number of reasons that went behind such a value.
Firstly, owing to the success of the bitcoin, its original owners who had once liquidated their shares are buying the shares back. The liquidation happened as a result of the valuation of reaching$20,000. Moreover, a lot of activity in politically-triggered nations like Venezuela and Turkey are picking up. In fact, these countries have also beaten inflation or political issues. However, Lee owes it to the cryptocurrency community that had stashed away a lot of Bitcoin for the right time and moment when the value hit $3,000.
Lee further said that the US’s Securities and Exchange Commission’s back-up for the community will be a hugely positive development, but there is a long way to go. Speaking of the US stock exchange and the effect it would have on the cryptocurrency market, Lee said:
“It feels like there’s a catch-up rally because the S&P move, year-to-date, is two standard deviations. You know, it’s like the 10th best in the history of the stock market first quarter… And if Bitcoin rallied two standard deviations, it would be, you know, close to $19,000.”
Cryptocurrency seems to have resurfaced from a dark phase of crypto winter when the valuations went spiralling down. This was because of the various cyber crimes and corruption issues that shrouded the industry. Cryptocurrency lost its image, and people lost their faith in the industry after unlimited hacking, and other criminal cases surfaced.
However, things have looked up now as hotels, retails and stores have started accepting this mode of payment because of their convenience of use and transparency. Regulations and strict vigilance are being conducted across continents, and cryptocurrency criminals are being punished severely under mainstream law. Countries are also looking up to it as an option for payment and currency exchange, and some of them have also chosen to pay its workers in this form. Cryptocurrency, indeed, has a bright and prospective future, if the hacks and the cyber crimes get controlled.