After suffering a steep trading selloff the week before Christmas, cryptocurrency Bitcoin recouped some of its losses, trading above $16,100 on Tuesday (Dec. 26), and around $15,200 late Wednesday afternoon (Dec. 27).
Bitcoin fell 5 percent and Ethereum declined 1 percent Wednesday, according to Coinbase. Ripple rose 20 percent Wednesday to an all-time high.
Ethereum is an open-source, public, blockchain-based distributed computing platform featuring smart contract functionality. Ripple is a San Francisco-based startup using blockchain technology to develop a payments network for banks, digital asset exchanges and other financial institutions.
2017 was Bitcoin’s year. 2018 will be Ethereum’s, Coindesk guest columnist Jez San opined. San is CEO of FunFair Technologies, an Ethereum-powered casino platform:
“The door is wide open for blockchains that use smart contracts, like Ethereum, and I believe their potential market dwarfs that of ‘store of value’ chains,” San wrote. “Platforms like Ethereum are an operating system for decentralized finance and commerce. They power applications – lots of them.”
Interest in bitcoin was so high on Tuesday that Coinbase — the leading U.S. platform for trading major digital currencies — reported a backlog of outgoing transactions for both bitcoin and Ethereum. Coinbase said outgoing transactions could be delayed for several hours.
As of Tuesday, bitcoin recovered more than 50 percent of its losses since hitting a low of $10,400 late last week, Pymnts.com reported. Friday (Dec. 22) was particularly volatile, with no reason for the wild swings in the cryptocurrency trading. Bitcoin sank briefly below $11,000 on Friday, down 47 percent from a record high at the beginning of the week.
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Before going into correction mode, the overall crypto market was on a full swing with several altcoins like Litecoin, Ethereum, and Ripple contributing to the rally, according to Coinspeaker.
Bitcoin futures also dropped on Friday, Pymnts reported:
The CME bitcoin futures that launched Saturday, which will be expiring in January, reached “limit down,” tumbling almost 20 percent to $12,265 in morning trading before settling at $14,135, which is 7.8 percent lower. And the Cboe bitcoin futures contract, which launched Dec. 10, briefly dropped 21 percent to $12,050.
Ethereum traded 0.2 percent higher near $767, down about 13 percent from its record high of $881.44 — reached on Thursday — according to CoinMarketCap, WGRZ.com reported. Bitcoin offshoot bitcoin cash traded 0.8 percent lower near $2,825, according to Coinbase.
Ethereum, the second largest cryptocurrency, could become as successful and profitable as the larger bitcoin, according to Oliver Isaacs, a serial entrepreneur, tech investor and tech influencer.
“I predict Ethereum will have the best long-term potential of any cryptocurrency … due to flexibility and smart contracts,” Isaacs told Express.co.uk. “The cryptocurrencies I personally invest in are ones which provide a value or purpose, future applications in our everyday lives as well as solid growth. Thus I have invested in undervalued coins which have a lack of awareness.”
While the cryptocurrency market is unregulated and not tied to any public companies or indices, it’s just a matter of time before its volatile nature impacts the stock market, predicted Christopher Harvey, head of equity strategy at Wells Fargo & Company (WFC), owner of the WellsTrade robo-advisory service, Investopedia reported.
The slump in bitcoin over the holiday season will spill over into other investments, Harvey said late last week in an interview with CNBC. “We’re beginning to see a very small glimpse of that today, with technology down a little bit,” he added:
“Although bitcoin is not tied to any companies, there are a handful of public ones that have benefited from the bitcoin craze, including Nvidia Corporation (NVDA) and Advanced Micro Devices, Inc. (AMD), both of which make computer graphics chips. Their semiconductors were in high demand earlier in the year as people rushed out to buy them to mine for bitcoins. That sent shares higher all year long, although it is not clear if the bitcoin-fueled demand for their semiconductors will continue in the new year.”
Investors shouldn’t worry too much yet, said Jeffrey Kleintop, Charles Schwab’s global chief investment strategist. The independent nature of bitcoin means that investors should not be concerned with a crash in the price of the tokens. “If prices for bitcoin were to plunge suddenly, because it’s so independent from the financial system, it’s kind of its own thing,” Kleintop said in a recent interview with Business Insider. “It hasn’t yet become embedded in the economy and the financial structure.”
For tech investor Isaacs, thinking about cryptocurrencies is thinking about the long term. “I would not be surprised if cryptocurrencies will eventually obsolete all other forms of money as it frees society from its current condition of economic enslavement,” he said.