Warning: Bitcoin bubble set to burst, return to May 10, 2017 levels at $1800
Just 24 hours ago, Bitcoin (BTC) was sliding towards $13,000 levels on fears of South Korean crackdown on crypto money laundering and ban on trading.
Today it has stabilized at just over $13,000.
Few months from now, it will implode back to $1800, if not less.
The price outlook for BTC in 2020 is below $1000.
You heard right!
Bust not boom
Business Insider reported that a Wall Street consultancy projected a wipe out for crypto, saying “…this massive report should strike fear into the heart of every bitcoin bull.”
Quinlan & Associates put out a report dated January 11, 2018 titled “Fool’s Gold: Unearthing The World of Cryptocurrency” in which they outline a case for Bitcoin dropping to $1,800 by December 2018.
The 156-page report says that BTC’s current price near $14,000 is far above what it is worth.
Business Insider brought the following report summary: “As an asset, we valued Bitcoin using a cost of production approach and a store of value approach, resulting in values of $2,161 and $ 687 respectively. To value BTC as a currency, we estimated its utilization for both legal, retail transactions payments, as well as payments in the black market. After significant testing, we calculated the price of BTC to be $1,780.”
At its current valuation, the consultancy concludes bitcoin is a bubble “waiting to burst.”
If Bitcoin is not adopted as payment method, the firm predicts a major BTC correction to $1,800 that’ll also drag the cryptocurrency market down 70% to $223 billion later this year from its current position above $700bn, reported Business Insider.
The firm’s long-term outlook for bitcoin is even more dreary.
According to the report, it sees bitcoin trading at just $810 in 2020.
And not even Kentucky Fried Chicken can rescue BTC. KFC?
Finger licking coins
According to Coindesk, KFC Canada is accepting Bitcoin for a cryptocurrency-themed bucket of chicken.
“The limited-time marketing move sees the Canada-based chain advertising “The Bitcoin Bucket” complete with a Facebook-based live-tracker of the standing price for the product, which works out to roughly 20 Canadian dollars depending on the exchange rate with bitcoin,” said Coindesk.
KFC is accepting Bitcoin via BitPay, or other cryptos as some of the options through an online check-out page. The Bitcoin Bucket will be delivered directly to the customer’s address.
Photo and Facebook coin?
The Economist recently said that Kodak wants to jump on the crypto-wagon: on January 9th it announced that it will launch a coin to allow photographers to charge for their works.
Even Facebook has reportedly started looking into creating a token.
Good news for a change
Forbes said that Ripple coin XRP is benefitting from a MoneyGram Deal that trumped talks Of South Korea’s crypto ban.
XRP is back trading over $2 thanks to an announced deal with Dallas-based MoneyGram which will allow their customers to send and complete cross-border payments with the XRP token instead of fiat currencies like the dollar.
“Ripple has been rising from a small, relatively unknown cryptocurrency to a top-three behind heavyweights bitcoin and ether. Major venture capital firms and banks have invested in the company, including Google Ventures and Standard Chartered bank,” said Forbes.
When South Korea said recently it was planning to ban trading in Bitcoin it sent shock waves and plunged crypto prices.
But all that has changed, according to Sputnik International, a Russian news agency.
“On Thursday (Jan 11), the South Korean justice minister said the government was preparing a bill to ban cryptocurrency trading, sending the price of Bitcoin down. However, the government later softened its stance on the issue, but still stressing the need to regulate the market,” said Sputnik International.
According to Coinmarketcap.com, Bitcoin grew 2.29%, to $13,700, while Ethereum rose by 2% to $1,230, Ripple by 21% to $2.05 and Bitcoin Cash by 3.55% to $2,570, helping bring the cryptocurrency market cap to $689bn, and placing BTC at 34% of global trading.
Credit cards for buying cryptos
Bloomberg said about 18% of Bitcoin investors have used a credit card to fund purchases of the cryptocurrency, citing a LendEDU survey of 672 active investors conducted in December 2017.
Of those, 22% could not pay off their balance after buying the digital coin, the survey said.
Interest in buying Bitcoin with a credit card has surged, according to Google Trends.
Such a move “is not a wise decision no matter which way it is spun,” LendEDU research analyst Mike Brown wrote in his findings.
“There is no guarantee that Bitcoin investment returns will be profitable in the long run, but one can guarantee that the credit card company will need to be paid back.”
According to the Economist, Bitcoin is no longer the only game in crypto-currency town.
The financial site talks of Dogecoin, launched in 2013 as a bitcoin parody, using as its mascot a Japanese shiba inu dog, a popular internet meme.
“The crypto-currency was never really used, except for tipping online, and one of its founders has called it quits. But on January 7th, its price soared making all Dogecoins in circulation valued at $2bn, the Economist said.
Bitcoin fell from its once value dominance at 80% of all cryptos, to now only about one-third of the crypto-market.
“A new crypto-currency is born almost daily, often through an “initial coin offering” (ICO), a form of online crowdfunding,” said the Economist.
CoinMarketCap, a website, lists about 1,400 digital coins or tokens, including UFO Coin, PutinCoin, and InsaneCoin (worth $7m).”
By January 10th, around 40 “bitcoin by products” had a market capitalisation of more than $1bn each.