Bitcoin coin

A malaise seems to have come to fruition in all crypto currencies recently as the extreme price gains from last year, certainly from a speculator perspective, have long since disappeared. Definitely in the very short term, there has been a trend of downward moving prices.

Generally, this comes at an important time for crypto currencies. Each week we move a step closer to the asset class becoming more main stream, certainly in the finance world as more officially regulated exchanges begin to try to adopt either just pricing or actual trading for crypto currencies. Only last week, there was positive news on the possibility of an Ether futures contract.

However, again if we move on the price sensitive side of crypto currencies, we are currently trading around 6 month recent lows. Ultimately this leads to a contradiction in terms – increased availability for Institutional investor traders should, arguably, lead to an increase on speculation terms in price. This hasn’t materialised – in fact, we have the opposite.  Overall, the asset continues to be widely popular – but again this is a contradiction in terms of the actual use of the asset.

Firstly, we have the speculators largely trading on the intraday/week movements and secondly, we have users performing monetary tasks with crypto currencies. For example, buying a coffee with Bitcoin: it shows the  number of different uses for the asset but also the issues surrounding the asset class. For a genuine monetary tool, like fiat currency, you shouldn’t have 5% – 10% movements. Ideally, it should be stable and consistent.  But also for the use as a monetary tool, the asset needs to decide if it’s a genuine form of exchange or a turbo charged speculation tool. It can’t be both and the latter leads to an issue with what I call : opportunity cost : if you had bought a coffee with your Bitcoin wallet 5 years ago, it’s likely that the coffee could have bought you a car, a very nice car, at today’s prices.

Chief Trader,

Jordan Hiscott


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