The BTC price briefly reached 8,750 USD this morning and is again close to the 9,000 USD mark. But not only the Bitcoin course develops positively in the last weeks and months. Bitcoin’s fundamentals and the interest of institutional investors also seem to be on the right track.
The improved fundamentals and the increasing interest of large investors in BTC could influence the volatility and price development of future rallies and corrections.
Bitcoin Fundamentals Let BTC Price Rise
Aaron Brown, the author of a commentary article recently published in Bloomberg, believes that the next Bitcoin price rally could be even stronger. He cites the improved fundamentals and global financial products surrounding Bitcoin as the reason. The BTC is less likely to be driven up by greed and FOMO (Fear Of Missing Out). Also BTC is beeing used now for gambling in casinos too.
According to Brown, the behaviour of the crypto market is unlikely to change immediately. There will continue to be an extreme price boom and slump. This is mainly due to the small market, which can be influenced with little capital. If the Bitcoin price rallies from the past should repeat themselves, then the BTC price will rise to 60,000 – 400,000 USD and then briefly collapse again. Most people are using popular exchanges like bitseven to buy bitcoins, more on bestbitcoinexchange.net.
Bitcoin Dominance and Market Capitalization
Brown argues that the last two bullruns in 2013 and 2017 were driven primarily by private investors and that 2019 will be very different. The current market capitalisation of all crypto currencies is USD 260 billion.
By comparison, market capitalization was USD 1 billion in 2013 and USD 17 billion in 2017. This is mainly due to the emergence of thousands of Altcoins in recent years. In 2013 the Bitcoin dominance was still 95%, at the beginning of 2017 85% and currently only 56%. Bitcoin still has the market under control but not as it did a few years ago.
Interest in Bitcoin and Crypto is growing with large companies
In addition, today there are significantly more investors in crypto currencies and the entire infrastructure. In 2018, more than USD 30 billion of institutional and invested capital went into building new platforms. This trend seems to us to continue. A lot of money continues to flow into the development of new projects.
There is also more clarity at the regulatory level. The first regulations are slowly taking effect and are bringing some order to the wild Crypto West. Companies such as Facebook, Goldman Sachs, JPMorgan Chase and Fidelity that invest in the sector are also strengthening Bitcoin and the crypto market as a whole, as well as increasing confidence.
Bitcoin price will lose volatility and become more stable
Although the development seems more than robust, Brown warns that this does not rule out the possibility of a new bubble and a crash. In his opinion, the market will at some point decrease in volatility and generate “predictable” returns and then “only” collapse by 20%.
In the past, the Bitcoin price and thus the entire crypto market collapsed by more than 85% after a bubble. But that would certainly also ensure that the next bubbles would no longer be so massive.
Bitcoin correlation with S&P 500
Another possibility to analyze the Bitcoin price development is the correlation of Bitcoin with the S&P 500 index. This gives an interesting outlook on the Bitcoin share price development in 2019. The more the correlation for a quarter is at zero, the more Bitcoin tends towards average high returns in the following quarter. However, volatility also increases enormously.
On the other hand, if Bitcoin reacts to fundamental data independently of the correlation, average returns tend to be lower or even negative.
Does the Bitcoin price break the USD 9,000 barrier through fundamentals?
For these reasons, Brown believes that the upcoming Bitcoin price cycle may be different than in previous years. He expects the BTC price to increasingly respond to news about Bitcoin Fundamentals over the summer, rather than pure FOMO.
We are currently on the threshold of USD 9,000. In the last attempt to break through the strong resistance zone, the Bitcoin price was pushed below 7,500 USD. Now it goes into the next round.
If the 9,000 USD can be cracked, then we could scratch the 10,000 USD mark within a few days. The positive development of the Bitcoin fundamentals could boost the BTC price development. It remains exciting. We will keep you up to date.