Are you watching bitcoin? We have held some crypto since the first implosion a year ago, as part of the BAD BEAT Investing approach.
We covered it a bit when things start to move like they have been. One thing we do ask is whether this rally is for real. Let us discuss what we see happening with bitcoin and ethereum and some other names.
Bitcoin has again rocketed up past $4,000 per bitcoin, giving fresh hope to long-suffering investors who have been stuck in a bear market for over a year—the second weekend in a row the bitcoin price has rallied.
The bitcoin price jumped from around $3,900 earlier today to over $4,100. This pushed bitcoin’s market capitalization over $70 billion and the total value of all cryptocurrencies to over $140 billion. So what is going on here:
Bitcoin and other cryptos have had a sudden price leap comes after a week of positive bitcoin news, with the confirmation of Samsung’s latest crypto-wallet supporting phone, tech billionaires talking bitcoin up, and approaching network upgrades.
Meanwhile, the price of ethereum has also shot up, rising some 6%. Elsewhere, Ripple’s XRP, litecoin, and EOS made strong gains, adding around 5% each. The bitcoin price has struggled to break out of its long-running bear market so far this year, with investors and traders desperately trying to call a bottom to the tumbling market that’s seen the value of bitcoin and other cryptocurrencies fall by more than $400 billion in a little over a year.
If you recall, the bitcoin price hit an all-time of almost $20,000 in December 2017 but has been falling since then, dropping as low as $3,000 per bitcoin over the last few months. It is interesting as this entire rally seems to have been caused by a shortage in the supply of new ethereum. The ethereum network had, until the beginning of this year, been producing about 20,000 to 30,000 new ether per day. However, since the beginning of the year the amounts have been tapering off and last week was producing 13,000 per day.
Next week ethereum’s long-awaited Constantinople upgrade is due to go ahead next week, on February 27. The upgrade, which will speed up processing times, improve the way the network monetizes data storage, and reduce mining rewards from three to two, is ethereum’s eighth hard fork.
We think this rally is for real. We believe bitcoin, tron, ethereum, and ripple are all solid plays. We are not expecting these things to go to the moon overnight, but think this rally holds and settles out next week, helping to lock in some nice gains.