By Guest Author – Sam Reads, Birmingham, UK
In 2017, the price of Bitcoin was mainly influenced by Fundamentals and less of technical analysis. It was largely affected by three major factors which helped fuel its all-time of $20,089. The Bitcoin maintained its position as the largest digital currency by value, 24-hour trade volume and market capitalization even after roller-coaster December trend.
The scaling debate effect
The scaling debate tops the list as the main driver of the Bitcoin after the Segwit2x scheduled for November 2017 was canceled due to lack of consensus. It is a hurdle to the Bitcoin due to its decentralized nature where no one has ultimate control or decision making. During the Segwit fork investors and the bitcoin community were very concerned of how it will affect the value of the bitcoin. It may be the reason or not why the Segwit2x failed, with speculation of a possible hit on the bitcoin. This may eventually cause a split at the bitcoin community.
Digital currencies in 2017 experienced an increase in media coverage with reputable mainstream media companies featuring it on their coverage. This was a result of the Bitcoin hype and over 1000% gain in value since the year started. Less than 3 years ago the media platforms were painting a fall or a bubble for the Bitcoin with its success being discussed on forums, family level or during casual outings. Regulators joined the party either condemning the crypto or warning of a bubble. This fueled the overall price of the bitcoin as investors and people started to understand it better and why goverments and regulators are against it.
A new wave of investors and increase of institutional money
After gaining attention from the mainstream media and a rise to its all-time high, major institutions wanted to join the party. It received a major boost after the world largest futures trading Group Chicago Mercantile Exchange, ( CME) announced it was launching a Bitcoin Future. This created a new wave of investors with confidence that the Bitcoin will survive. This created a scene where one holds a significant amount of the bitcoin and speculating on other altcoin to hedge their risk.
However, at the end of 2017, the Bitcoin dropped to around $13000 its lowest after peaking its all-time high. There was no clear reason why the Bitcoin plunged, despite a minimal fundamental influence. Technical analysis can be the reason, with initial holders of Bitcoin showing no sign of cashing out. ulative traders helped in the price shifts as they hope to cash in by placing short positions.
Even though there have been negative fundamentals, the Bitcoin price was unaffected by its demand growing higher. News of Merrill lynch brokerage imposing ban on Bitcoin advisory services, is an example that failed to impact the price of the Bitcoin. However, news of the failed Ripple listing on Coinbase, made it gain over 11% on Friday. It seems the Bitcoin will remain the most valuable cryptocurrency in the world!