Remarks at the recent 2018 Canada FinTech Forum by former U.S. Federal Reserve chair Janet Yellen put more fuel on the fire about speculation around a Bitcoin bubble and doubt about the future of cryptocurrencies in general – and that’s having an impact on today’s news as we all wait with bated breath for a change in BTCUSD.
In Yellen’s outlook, Bitcoin is not useful, not stable, and not really great as a payment medium.
“It’s very slow in handling payments,” Yellen said, according to reporting at Cointelegraph. “It has difficulty because of its very decentralized nature.”
That doesn’t really jibe with a lot of the reasons that people are investing in Bitcoin or putting it into new digital payment systems.
It does, however, add to the collection of voices decrying the popularity of Bitcoin on today’s markets and suggesting that long-term outlook is decidedly bearish. Many recent accounts of Bitcoin’s future health note the very outspoken Nouriel Roubini as a sort of “negative Bitcoin Guru” who argues the whole thing is going to crash and burn.
So while Yellen’s outlook and lack of confidence are not unique, her position as a former part of the central U.S. banking system gives her remarks some amount of sway – and fit with the idea, proposed by some Bitcoin zealots, that government banks just don’t like change or competition.
This type of criticism of Bitcoin has also been going on for some time – back in August, as Roubini was explaining why the bottom would fall out from under Bitcoin any moment, this article at CNBC was looking for indicators of a Bitcoin bubble, with an attractive feature image conflating Bitcoin with “tulipmania,” a classic case study of financial bubbling.
The idea reported here by Elizabeth Shulze and attributed to Dutch National Bank policy advisor Joost van der Burgt seems to be that when investors were asked to put their money where their mouth was by participating in newly released Bitcoin futures markets, something happened to Bitcoin value. A chart labeled “spurious correlations” shows that up until that time, search volume around Bitcoin tracked more or less with price value – until the futures markets were introduced, and then those two indicators became untethered.
“My take on it is that because of the introduction of futures, that might have deflated the bubble before it got to a level where it might burst completely,” van der Burgt reportedly said in August.
For others, though, Bitcoin has already crashed – if you bought in near the high of around $19,000 and change, the current Bitcoin value, hovering around $6,500, seems like a sad pittance. But to others, it’s time to buy in again…
Meanwhile, in today’s trading session, Bitcoin stays around that $6,300 mark remaining in the same supports for what seems like the umpteenth time – in fact, you can go all the way back to July and still see the same type of price activity, albeit with a big spike around the beginning of August, and a smaller one in September.
So today, the bulls and the bears continue to peer at that squiggly line, and candlesticks, and MACD and everything else, to see where Bitcoin is going to move. If the bubble people are right, that value is going to steadily decline over time.
However, if those who see Bitcoin as an integral part of future digital payment systems are right, that value is going to steadily rise. Everyone agrees there will be some big bumps along the way – and that’s what the day traders are looking for – some kind of breakout or some type of activity to break this sideways spell.