Bitcoin: What Could Trigger Another Rally?
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Why is December 17th a pivotal anniversary for Bitcoin's price history?
Here's your Money Briefing for Tuesday, December 17th. I'm J.R. Whalen at The Wall Street Journal in New York. It's been two years since Bitcoin hit its all-time high of nearly $20,000. Well, since then, Bitcoin's value has fallen more than 50%. Wall Street Journal cryptocurrency reporter Paul Vigna will tell us what it'll probably take... for Bitcoin to ride high once again. First, some money and market news you should know. Amazon has a message for its third-party sellers. You are forbidden from using FedEx Ground delivery to ship Amazon Prime purchases.
What Amazon shipping news could affect consumer markets and relevance to Bitcoin timing?
In a letter to merchants, Amazon says that FedEx Ground and Home on-time performance has declined, and the ban will remain in place until delivery performance improves. The shipping data analysis company Shipmatrix ran the numbers, and it says that during the week of Black Friday, UPS deliveries were on time about 93% of the time, and deliveries that Amazon made itself saw about 94% on-time accuracy. but FedEx deliveries were only 90% on time. Now, Amazon says its third-party sellers can still use FedEx's speedier and more expensive express service for Prime orders, or they can use FedEx Ground for non-Prime shipments.
For Bitcoin investors, December 17th is a dubious anniversary.
Why did Bitcoin's price fall more than 50% after its 2017 all-time high?
In 2017, the cyber currency hit its highest level ever, $19,783. Investors from all walks of life entered the market, and so did Gravity. Since December 2017, Bitcoin has traded as low as around $3,000 and currently sits at a level about 50% off its high. So where does it go from here? Let's bring in Wall Street Journal cryptocurrency reporter Paul Vigna for some answers. So Paul, Bitcoin has recovered somewhat from its low in December 2018, but there really hasn't been a lot of movement since then.
No, there hasn't been. And the problem is that in 2017, what you had was the culmination of several years worth of development in Bitcoin, not just technically, not just companies being formed and startups and businesses. But socially, as a movement, I think it's really important to remember that Bitcoin, as much as it is a technology, it was also a social movement. And in 2017, that exploded. So you had this very sort of thinly traded asset that suddenly becomes extremely popular. People jump into it and it drives the price up very, very high. While that was going on in 2017, you had this concurrent phenomenon called the ICO market exploding, the initial coin offering. They were basically trying to take the IPO model and transfer it over to digital tokens.
Well, it's not a bad idea, but the way it was carried out, it was extremely rife with fraud and just very, very bad practices. And while Bitcoin was reaching this peak in popularity, you also had this peak in just bad projects, nefarious projects, a lot of fraud. I mean, look, what happened was Bitcoin became valuable and it attracted a lot of bad actors. The problem now is that the good people that were interested and probably got burned have gone away. And a lot of what's left are the bad actors.
So you have 44 million Bitcoin wallets out there or accounts out there. And not very many of them actually are holding Bitcoin at this point.
A lot of those probably are people that opened a wallet, you know, downloaded the software or opened an account on Coinbase or blockchain or one of these other ones. Hey, my neighbor made a lot of money. Let me try this out.
How did the 2017 ICO boom and fraud contribute to a change in Bitcoin's investor base?
Yeah. Right, exactly. You know, made one or two trades and then just left the thing there. So what you end up with is there is a very small percentage of those wallets that are actually active. And that's a reflection of how much this cryptocurrency sector has become an insular product. In other words, it's a lot of people that are inside Bitcoin trading among themselves. So it's like institutional traders? No, no, no. That's kind of different. There are some institutional traders. That's the big white horse hope that they've been waiting for is that Wall Street's going to come in. That's something a little different. This is literally just people within the industry, within the sector, Bitcoiners trading among themselves.
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Chapters
6 chapters
1
Why is December 17th a pivotal anniversary for Bitcoin's price history?
0:05–0:40
2
What Amazon shipping news could affect consumer markets and relevance to Bitcoin timing?
0:40–1:31
3
Why did Bitcoin's price fall more than 50% after its 2017 all-time high?
1:31–3:57
4
How did the 2017 ICO boom and fraud contribute to a change in Bitcoin's investor base?
3:57–5:46
5
What explains the current low trading activity and insular nature of the Bitcoin market?
5:46–8:36
6
Why haven't Bitcoin ETFs and Wall Street money sparked a new influx of investors?
8:36–11:07
Speakers
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