Bitcoin (BTC-USD) is a cryptocurrency that has been in the recent news and headlines all over the world in recent months. The once primitive and unknown coin is now mentioned daily in many financial outlets.
With the price of Bitcoin sharply correcting after soaring for most of 2017, Bitcoin is currently selling at trough valuations making it an ideal buy at these levels.
A Return To A Bitcoin Bull Market May Be Coming Soon
The price of Bitcoin may soon recover back towards its 2017 peak based on several key catalysts that may help propel the cryptocurrency markets back up. While prices have definitely come down from its all-time highs, Bitcoin is now a much safer bet than back in December when Bitcoin was selling at nosebleed prices.
It is clear that while Bitcoin is backed by a promising blockchain technology, the price of Bitcoin itself may have gotten ahead of itself in the latter part of 2017. With limited adoption and few actual use cases, Bitcoin arguably had risen far too fast too soon.
In order for Bitcoin to be considered as a valid currency or as a means of store of value, we will have to grow in a steady organic pace. Sudden growth spurts and bubble cycles will only validate the point of view that Bitcoin is not suitable as a valid currency or even as a good store of value.
While sudden growth spurts can bring outsized gains to investors looking to beat traditional markets, it can also work inversely as seen in recent months with Bitcoin losing a significant amount of value from its all-time highs. Luckily for investors, Bitcoin has several important key catalysts that could end the current bear market.
Catalyst #1: The Current Regulatory Environment May Soon Ease For Bitcoin
Much of Bitcoin’s current fear is due to investors fearing additional regulation from the government. Investors fear that regulation could potentially destroy the decentralized-based Bitcoin system. However, this may soon be changing. In the U.S., the top SEC director declared that Bitcoin and Ethereum (ETH-USD) are not considered securities according to Federal Law. This means that both cryptocurrencies can avoid unnecessary regulation and scrutiny by the government. This alone should tell investors not to fear the current regulatory landscape, and William Hinman’s comments should have eased a lot of investors’ minds. Although the price of Bitcoin failed to rally on this news, it is a testament to how the government is likely to react to these top 2 cryptocurrencies. This is a clear buy signal since it proves that the regulatory fear behind Bitcoin is unsubstantiated.
Catalyst #2: More Exchanges Are Receiving Approval To List Bitcoin And Other Altcoins
An increasing amount of exchanges are beginning to offer cryptocurrency trading. In fact, the popular money exchange app Square recently received an official New York State license allowing customers to buy and sell Bitcoin. This is a testament to the increasing popularity of Bitcoin despite the dropping prices. Another cryptocurrency platform named Abra is an American Express (NYSE:AXP) backed cryptocurrency that recently began to expand their range of services from just being able to buy and sell Bitcoin to numerous other cryptocurrencies. The Abra app along with Square can potentially bring additional awareness and availability of cryptos to ordinary retail investors. One of the common complaints of past investors is the difficulty for ordinary investors to purchase cryptocurrencies. With the availability and creation of these types of apps, many more investors will now have access to buying Bitcoin which will eventually drive prices back up.
Catalyst #3: High-Profile Fund Managers And Institutions Are Beginning To Back Bitcoin And Other Cryptocurrencies
Bitcoin is no longer viewed primarily as a means of exchange by criminals and other money launderers. With the recent interest of high-profile fund managers coming into the cryptocurrency space, it is unlikely that cryptocurrencies will go away any time soon. For example, former Wall Street hedge fund manager Michael Novogratz has invested a significant amount into Bitcoin and other cryptocurrency startups. One such investment is his $15M investment in AlphaPoint, a New York-based company that helps institutions launch cryptocurrency platforms. Similarly, Novogratz also contributed to funding another relatively new cryptocurrency called EOS through a $325M ecosystem fund with his partnership with Block.one.
There are countless other examples of other high-profile fund managers doing the same, solidifying their spot in the cryptocurrency space. This kind of institutional money is what the Bitcoin ecosystem needs in order to grow and attract more money into the space. If this trend continues, Bitcoin is likely to increase in value over time as more institutional money comes into the space.
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