Bitcoin may be spiking a bit but does this run cover the concerns of bear experts
Last night, Bitcoin show a spike of more than 10% in 20 minutes adding close to 20 billion in its market cap. As the bellwether coin spiked, a lot of cryptocurrencies followed the suit. The cryptocurrency broke above $7,000 for the first time in around a month thanks to the rally. Tuesday’s rapid price surge didn’t appear to be correlated to any immediate news, at least short term, but this looked like a combination of what everyone called a short squeeze and maybe some new money adding up.
As the prices spiral upwards the technical short-term sentiments seem to be headed to the green territory, but does this push have enough legs to change views of bear experts.
Bear experts not convinced with Bitcoin
A lot of fund managers and Wall Street experts have stated that they are not very optimistic about bitcoin future.
Mohamed El-Erian chief economic advisor at Allianz, considered one of the most influential financial market thinkers in the world commented a couple of weeks back that cryptocurrency would be worth considering if it falls before $5,000. Erian believes that bitcoin will not scale USD 20000 again as it has a number of obstacles in its way up, from continued stories of fraud to threats of a regulatory hammer coming down across the world.
So was the thought of O’Shares Chairman Kevin O’Leary has stated that he is not sold to the idea of Bitcoin or the Bitcoin ETF at the moment due to a lack of regulatory oversight that scares off major investors.
Nouriel Roubini, who many have labeled as “Dr. Doom” due to his pessimistic economic outlooks continued his run with pessimism towards Bitcoin as well when he was quoted in February saying that
“So a $5K handle looks likely unless the crypto-manipulation gangs start [sic] pumping and dumping or washing trading again. So HODL nuts: be ready for a 75% loss from recent peaks.”
Todd Colvin, the analyst at Ambrosino Brothers, had also stated at the start of this month that he would like to clarity on factors such as security, regulation, and accessibility, which could turn him bear to bull. The next “psychological level” Colvin is watching for is $5,000. Bitcoin has not traded below that level since October 2017.
Factors they are looking for to turn bullish
As we read the above statements and of many other bear experts on cryptocurrencies, we can draw some common points that cryptos will have to cross before it could actually be called to be in the bull phase. Regulation is key for everyone. All traditional financial institutions have spoken about this. It is difficult for these institutional investors to deploy their money into cryptocurrencies till they get some clarity on regulation as without which they would be risking theirs and their client’s money into something that is just a speculative tool without the legal holding of it.
The second common thread among all is security. Nearly everyone around the globe has seen cryptos industry marred by scams and hacks, another major reason a lot of people have stayed away from it. No one wants to lose their money investing in an instrument that still does not have security from being robbed or stolen.
There is still a good deal of misinformation and lack of clarity regarding bitcoin trading, and fraudsters have taken advantage of this to launch Ponzi schemes, which promise ‘guaranteed high returns’.
The third concern with the bears have is Bitcoin accessibility and usability. Not everyone is accepting Bitcoin in real-world business. A few have begun but the number is still very small. This is another reason that is keeping the bears unhappy as even if one holds the bitcoin where does he use it.
Until the aspects of regulation, usability and security are actually met with, it will be difficult to turn the attention of experts that are bearish on cryptocurrencies. Slowly things are changing and may take some time for everything to fall in place.
As these concerns remain to call this short-term bust of price rise actually a bull phase would slightly be difficult. Let’s see if this spike continues to hold on.
Will this spike in the prices sustain? Do let us know your views on the same.
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