History Repeating for Bitcoin? Cryptos See Continual Rises Over 2019, Are We Seeing 2017 Part 2?
Over the course of the quarters of 2019, Bitcoin, among other kinds of cryptos out there, have been enjoying some pretty impressive returns thus far.
Compared with the bitter winter of 2018, and according to CoinMarketCap: Bitcoin has managed to recuperate more than 76 billion dollars on its total market cap compared to the same time last year ($111 billion – September 2018 versus $187 billion as of the time of writing).
It's because of this impressive break out over this year that questions are arising as to whether we are seeing history either repeat or, in the words of Mark Twain (allegedly), rhyming with the financial performance we saw back in 2017.
If we take a longer look at the kind of trends in a performance that Bitcoin has experienced, or sometimes endured from 2014 onwards to now, the digital currency has managed to actually increase in market value of over 7,700%; a gradual, yet fluctuating rise.
The first quarter that Bitcoin endured back in 2014, it actually recorded a return of roughly -39% but managed to break even with a 40% quarterly return in the second quarter of the same year. Over the course of the latter 2 quarters of this same year, however, Bitcoin bit some pretty bitter retreats of -39.53 and -17.25 percent.
This was far more than just a singular occurrence in 2014, we saw the same kind of phenomenon take place over the course of 2015 and 2016; with Bitcoin finishing up in the red, showing to any budding investors that BTC was in a really bearish downturn.
Bitcoin Recorded Spectacular Returns of 2017
In stark contrast to these kinds of negative returns over the first three years, 2017 actually saw both the value and general momentum behind Bitcoin pick up on an upward trend and actually go far beyond the previous ‘red' quarters seen in 2014-16.
The first one, for example, it's market value rose by 11.21 percent, which was followed by a monumental surge of 131.47 percent in the second. This traction continued in spectacular fashion, jumping by more than 74 percent over the third quarter before really springing upwards by 226 percent by the final quarter.
So while we are seeing some positive behavior from Bitcoin for the moment this year, the emphasis is on ‘for the moment' as we are still dealing with the latter quarters of 2019. But for right now, we are actually seeing a relatively similar trend to 2017 that has shaped up over 2017. During the first half of 2019, BTC managed to see a rise of 10.34 percent, which was followed up by a pretty exceptional increase of 161.5 percent over the latter quarter.
While we are seeing the finishing months of the third quarter, so far, its value has risen by 1.05 percent, and still represents an increase compared to other years. It is still not fully clear what exactly will happen over Q4 of this year, but from what we have seen so far from 2019 compared to 2017: we may, in fact, be seeing a similar level of performance as two years ago.
It must be argued that, even though we are seeing similarities, correlation does not imply causation, and history never repeats. And one of the big differences that we have to contend with is the fact that this rise does not follow the similar kind of buying trends.
2017, for example, saw increases due in large part to the interest of the commercial and public sectors; those buying into the hype and its potential as a currency. 2019, by stark contrast: you're seeing a large influx of capital from Over The Counter trading (OTC), as well as institutional investors from companies with their eyes set on real-world applications of the digital assets and technology.
The Launch of Bakkt
The best has been coming hard and fast for Bitcoin, especially as Bakkt went from a wholly theoretical concept and proposal on the desks of members of the SEC, to something that has now hit the ground running.
Even though this is good news in itself, HODL-ers of Bitcoin were actually expecting more in the way of goodies from the launch. Especially as the fully regulated Bitcoin exchange launched its own innovative ‘Warehouse' custody solution, and is coming into use as of September 23rd.
With the introduction of this new exchange, users and institutional investors will not only have greater access to a wide array of crypto assets, but also a much greater scope of accountability to price discovery. Bakkt also makes investing in cryptocurrencies far easier, and friendlier for those investors that are otherwise new to the environment.
The Bakkt exchange will also allow for investors to actually settle a range of futures contracts with real, as opposed to virtual Bitcoin, a move that rings very positively in the ears of BTC enthusiasts and budding buyers.
“Bakkt Warehouse custody is live. Now accepting customer bitcoin deposits and withdrawals. Only 17 days until the Bakkt Daily and Monthly Futures contracts launch on Sep 23.”
This was the announcement that was made over the course of this week by the Bakkt team via Twitter, with the company already accepting withdrawals and deposits for this new upcoming solution.
Jerome Powell Gives his Own Insights on BTC
As we've seen from the stock market in light of comments from the Trump administration – words can be powerful things. And an example of this that we've seen recently for Bitcoin has actually been from Jerome Powell, the Chairman of the US Federal Reserve –
“If people are leaving their money in cryptocurrency and leaving it there, they are not putting it in a bank. [….] What happens to the intermediations process if everyone is investing in these cryptocurrencies?”
So what kind of impact did these comments have on Bitcoin as a whole? For one, the value of Bitcoin slumped by roughly 6 percent as a whole.
These comments originated from a question and answer session during a talk in Zurich, and were followed by an announcement that the central bank would not be considering a launch of its own cryptocurrencies in the foreseeable future.