Happy Bitcoin New Year

Each morning for the last three weeks I awake around 5:15am and take a look at the overnight action in bitcoin.

And I discover that the Chinese buyers have taken the crypto-currency up another $50. Then during the US trading day the price takes a bit of a hit or stands still until the evening hours when it begins to rise.

This morning the bitcoin price hit an all-time high of $1,087. Since bitcoin never stops trading the chart shows a big uptick since Dec.10 of last year when China admitted it needed to adjust its currency — the yuan. The fear of additional capital controls and the yanking of yuans from the economy to strengthen the currency have been the driving force behind the latest bitcoin moves.

Since Oct. 1 2016, the price of bitcoin has soared 44%. But since Dec. 20 it has risen 26.5%.

Now I am not pumping bitcoin as an investment, I am using this as a new economic index to assess currency markets. I stress bitcoin is not an investment, since I do not think there is enough liquidity in the marketplace to make it safe for your future needs, due to volatility and perhaps hacking of bitcoin wallets.

I have been in bitcoin for some years, but only as a niche play. Remember that the US government has a substantial stake as a result of the Silk Road prosecution, so it can sell off its stake to stifle price growth. However, once that move is made, there is no options or futures market that can be manipulated to alter pricing. Not yet anyway.

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One thought on “Happy Bitcoin New Year

  1. Pingback: The rollercoaster that is bitcoin | GRAY'S ECONOMY

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