Here’s Why Commodities Whiz Dennis Gartman is Avoiding Bitcoin

Bitcoin is trading under $4,450, but according to investor Dennis Gartman he’s not buying into the digital currency.

According to the editor and publisher of The Gartman Letter, he doesn’t understand bitcoin.

He said:

“It is a punter’s dream. I give them credit for that, but it is something that I will absolutely stay away from, have stayed away from it, didn’t understand it to begin with, don’t understand it now.”

As of the 17th August, bitcoin is trading at $4,439, pushing its market cap to $73.3 billion. In the past 24 hours its value has risen by seven percent. Over the last seven days it has increased by 31.24 percent, according to CoinMarketCap.

Despite bitcoin’s dominance, Gartman remains weary. So much so, that the currency’s price fluctuation isn’t convincing him to invest. The highest figure it has reached was when it was within touching distance of $5,000 at $4,482. Shortly after it dropped to just above $4,000.

He states:

“What bothers me is that something that can move 5, 10, 15, 18 percent in the course of the day for what’s supposed to be a pricing mechanism. How can you buy a house? How can you buy a car? How can you buy Starbucks with bitcoin when the price is going to fluctuate as [dramatically] as it has?”

Bitcoin’s Value Quadruples

Since the beginning of 2017 the number one cryptocurrency has seen its value quadruple. Then its market value was worth just $16.5 billion. While that was still an impressive figure, it’s not anywhere near what it has achieved to date.

According to a report, if bitcoin was a stock it would rank as the seventy-fourth biggest by market capitalisation. This would put it in league with Adobe and Netflix on the S&P 500. Adobe has a market value of $73.6 billion while Netflix is worth $73.8 billion.

It has already passed the likes of PayPal, Costco and Salesforce.

Furthermore, by 2030, research by U.K.-based Magister Advisors suggests that bitcoin will become the sixth largest global reserve currency. After interviewing thirty leading bitcoin companies they believe it could be as widely used as the Swiss franc or the Australian dollar.

Optimism over Bitcoin

It’s now getting harder for investors to ignore digital currencies. That’s according to Goldman Sachs.

On the 5th August, when bitcoin reached $3,200 for the first time, analyst Robert D. Boroujerdi and his team said:

“With the total value nearly $120 billion, it’s getting harder for institutional investors to ignore cryptocurrencies.”

Nearly two weeks later and the market cap value is worth $144.6 billion.

Naturally, with the digital currency continuing to dominate the market, investor interest is increasing. Not only that, but many are turning to bitcoin as a safe haven amid geopolitical turmoil.

In light of North Korea’s nuclear threat there has been a global selloff in stocks and bonds.

Recently, Brian Kelly, a CNBC contributor and head of BKCM, which runs a digital asset strategy, he said:

“Bitcoin is benefiting from geopolitical tensions – trading in Japan and Korea has increased significantly over the last few months.”

Furthermore, Fidelity Investments announced that they would be allowing clients to see their bitcoin and ethereum holdings on Coinbase. This is a rare example of an established financial services company being embracive toward digital currencies.

Hadley Stern, senior vice president and managing director at Fidelity Labs, said:

“This is an experiment in the spirit of learning what these crypto assets are like and how our customers may want to interact with them.”

Abigail Johnson, Fidelity’s CEO, has, in the past, spoken about her enthusiasm over the digital currency market.

Can it Scale $7,500?

With the current trajectory that bitcoin is on, one has to wonder how far it can go?

Ronnie Moas, Standpoint Research founder, recently made a revised projection that the digital currency could reach $7,500. In July he stated that it would scale to $5,000 predicting this would be achieved by 2018.

In light of bitcoin’s recent movements $7,500 is his new estimate.

According to Moas:

“What’s happening is the floodgates are opening. I believe there are hedge funds and very deep-pocketed individuals going into this now, really hundreds of millions of dollars.”

He also thinks that the value of bitcoin will climb to $50,000 by 2027. Compared to others, though, Moas’ estimations are quite conservative, which he admits to.

$100,000 Predictions

Unlike Moas, Dennis Porto, a bitcoin investor and Harvard academic, he predicts that bitcoin’s value will jump to $100,000 by February 2021. He thinks this is possible if the currency follows Moore’s law.

He said:

“Any technology that is growing exponentially (i.e., ‘following Moore’s law’) has a doubling time.”

According to Porto, since bitcoin was introduced in 2009 it has double every eight months. Therefore, until it reaches mass adoption, he thinks bitcoin could reach $100,000 by 2021.

Kay Van Petersen, a Saxo Bank analyst has also predicted a $100,000 future for the digital currency. However, he thinks this will happen in 10 years time.

In a report, Van Petersen said that while his estimations are ‘conservative’ he believes in where the market is going.

He said:

“This is not a fad, cryptocurrencies are here to stay. There will emerge two to three main ones. Bitcoin will be one of those. And the reason is the first-mover advantage, the scale and the pioneering.”

Interestingly, this is the same analyst who rightly predicted that bitcoin would reach the $2,000 mark by 2017.

A Wait and See Approach

All that remains is to wait and see what will happen next. Will bitcoin’s price go up or will it go down? Who knows, but a period of adjustment is to be expected. With such massive gains the digital currency will undergo a price correction.

According to Sheba Jafari, Goldman Sachs’ chart analyst, the cryptocurrency is currently in the ‘fifth wave’ of an ‘impulsive’ rally.

She thinks, in the short-term, its price will rise to $4,827 before entering a corrective phase.

She adds:

“This can last at least one-third of the time it took to complete the preceding advance and retrace at least 38.2 percent of the entire move.”

As such the digital currency could drop as low as $2,221 in Jafari’s opinion. For now, though, many are enjoying the advancements that the currency is making.

 

Featured image from Shutterstock.

Bitcoin Reaches All New-Time High Near $4,500; Drops to $4,000

The price of bitcoin soared above $4,400 and was within striking distance of $4,500 for the first time.

In the early hours of the 15th August, the digital currency recorded a new all-time high of $4,482, according to CoinDesk’s Bitcoin Price Index (BPI).

As can be seen from the chart above, throughout the day bitcoin’s price has continued to fluctuate.

At the time of publishing, bitcoin is trading at just above $4,000 at $4,018, according to figures from CoinMarketCap.

As a result, it has seen a -6.03 drop in value within the past 24 hours, but a 17.69 percent increase over the past seven days.

This slight dip in price comes after days of record highs, which has seen the currency’s market value soar to over $72 billion. At present, it’s worth $66.3 billion. The drop in price could be due to investors taking some profit after the rapid rise, which is to be expected.

Since the beginning of the year, though, the price of the digital currency has quadrupled in value. This has been spurred on by strong interest from the Japanese as well as geopolitical turmoil in North Korea.

Despite a drop in value, Ronnie Moas, stock research analyst and founder of Standpoint Research, said that bitcoin could reach $7,500. This price is a revision from his early $5,000 price projection for 2018.

Moas said in light of the new $4,000 mark that:

“What’s happening is the floodgates are opening. I believe there are hedge funds and very deep-pocketed individuals going into this now, really hundreds of millions of dollars.”

Bitcoin Market Cap Nears Netflix

When bitcoin’s market cap reached $72 billion it was reported to be within striking distance of major stocks like Netflix.

According to a report from CNBC, if the cryptocurrency was a stock it would rank as the seventy-fourth biggest by market capitalisation. Such a position would put it behind Adobe and Netflix on the S&P 500. Adobe has a market value of $73.6 billion while Netflix is worth $73.8 billion.

At present, bitcoin’s market value has already overtaken Paypal, Costco and Salesforce. Bitcoin isn’t a stock, though, as many investors view it as a currency or commodity.

However, due to its finite supply of coins, capped at 21 million, Moas is one individual who believes this could push bitcoin’s price up.

Riding an Impulsive Rally

Other analysts are being more bearish.

Sheba Jafari, Goldman Sachs’ chart analyst, said that the digital currency is riding a ‘fifth wave’ of an ‘impulsive’ rally. As such, Jafari thinks bitcoin’s price will rise to $4,827 in the short term.

She said:

“Once a full five-wave sequence is in place, the market should in theory enter a corrective phase.”

She adds:

“This can last at least one-third of the time it took to complete the preceding advance and retrace at least 38.2 percent of the entire move.”

Jefari said that this could see the digital currency drop to as low of $2,221.

Bitcoin Price Swings

If such a situation proves itself true, it won’t be the first time that the market has experienced a price correction.

When bitcoin sailed through the $3,000 barrier in mid-June it subsequently lost over $1,000 in value. On the 15th June, the digital currency was trading at $2,330, pushing its market cap down to $40 billion.

On the 26th June, the community underwent an anticipated price correction. While Fred Wilson, digital currency investor and Union Square Ventures partner, wrote in a blog post that:

“My gut says we are headed for a selloff in the crypto sector.”

Not All Doom and Gloom

It’s natural that the market will experience a slight drop in price after its rapid rise. Many think, though, that in the long-term its price will increase into the hundreds of thousands.

Dennis Porto, a bitcoin investor and Harvard academic, is one individual who has projected a high price. So much so, that he believes bitcoin will reach $100,000 by February 2021. He claims this is possible if it follows Moore’s law.

Kay Van Petersen, a Saxo Bank analyst, has predicted that the digital currency’s price will reach $100,000 in 10 years. This is the same analyst who rightly predicted that bitcoin would reach the $2,000 mark in 2017.

Not as bullish is Tom Lee, a strategist at Wall Street firm Fundstrat. He thinks that by 2020, the digital currency will be worth between $20,000 and $55,000.

As can be seen, though, these projections paint a bright future for the digital currency’s market. As a result, it’s becoming harder for investors to ignore the cryptocurrency sector. This is according to Goldman Sachs, who recently said in a note that:

“With the total value nearly $120 billion, it’s getting harder for institutional investors to ignore cryptocurrencies.”

At the time of publishing the entire market cap value is worth $133.3 billion.

Altcoins Drop in Value

It’s not just bitcoin that has seen a drop in value.

Ethereum’s price has dropped too. At present, it’s worth $285 and has seen a -4.19 percent drop in 24 hours. Over the last seven days, its value has decreased by -0.38 percent. Its market value is now worth $26.8 billion.

Third place ripple has dropped in price as well. It’s now trading at $0.160454 and has a market cap of $6.1 billion. In 24 hours its value has decreased by -5.27 percent and in seven days it has dropped by -12.38 percent.

Bitcoin cash, in fourth place, has experienced a slight drop too. At present, it’s trading at $295 with a market cap of $4.8 billion. Over 24 hours it has dropped by -1.05 percent and in seven days a decline of -15.31 has been reported.

Despite these price declines, eight place NEO is steaming ahead. Its market cap is currently worth just over $2 billion and is trading at $41.86. Even though it has dropped by -9.81 percent in 24 hours over seven days it has increased its value by an impressive 142.25 percent.

It remains to be seen how far this altcoin can go.

Furthermore, the community will be watching and waiting to see how much further the price of bitcoin will drop or if another surge in its price will be recorded. For now, many traders are enjoying this price rise which is producing big profits for many.

Featured image from Shutterstock.

Goldman Sachs: It’s Harder for Investors to Ignore Digital Currencies

Goldman Sachs has said to clients that the boom in value that digital currencies are experiencing is ‘worth watching.’

Analyst Robert D. Boroujerdi and his team, said in a note to portfolio managers, that:

“With the total value nearly $120 billion, it’s getting harder for institutional investors to ignore cryptocurrencies.”

On the 5th August, the price of bitcoin reached $3,200 for the first time in its history. Prior to reaching that milestone it hadn’t seen $3,000 figures since the 12th June. Then it recorded a price of $3,041, according to CoinDesk’s Bitcoin Price Index (BPI). Ethereum also recorded a new high price when it soared through $400.

More recently, bitcoin’s price has pushed through $3,300 and $3,400 with its sights set on reaching $3,500.

At the time of publishing bitcoin is trading at $3,390 and has a market cap worth just under $56 billion on the 10th August.

Over a 24-hour period, its value has increased just over two percent with a 23 percent rise within the past seven days.

Ethereum Flirts with $300

Ethereum, too, is seeing a rise in its value. At the moment it is trading just two dollars under the $300 mark.

Its price has risen by 2.17 percent over the past 24 hours and 33.50 percent within the past seven days. Of the top five digital currencies it has seen the biggest increase in price over the past week. Its market cap is now worth just over $28 billion.

The entire market value of the digital currencies is worth $122.6 billion. On the 7th August, it was $117 billion; however, on the 8th August it rose again to $121.8 billion. The lowest recorded price was down at $60 billion in July.

Bitcoin Cash Still Stays in Fourth

As can be seen from the table above, bitcoin cash, the newest altcoin on the block, remains in fourth place. It’s currently trading at $287 with a market value worth $4.7 billion. Over the past 24 hours, its value has dropped by 14.66 percent whereas it has declined by 33.77 percent over the past seven days.

On the 8th August, its value had risen to $358, experiencing a 35.45 percent rise which saw a market value of $5.9 billion. This was down to the fact that it is now easier for miners to find blocks. At the time it was questioned whether this would subsequently rise the coin’s value. As can be seen, though, bitcoin cash is still going through a fluctuating phase, which will continue to see its price rise and fall.

Digital Currencies Are Worth Watching

Now, in a significant step forward, Goldman Sachs believe that the rise of digital currencies are worth watching.

This year bitcoin has seen a 200 percent rise in price while ethereum has experienced a colossal 3,500 percent increase. The year 2017 is certainly proving to be a great year for the market and we’re only into August. It will be interesting to see how much further the sector can go.

Not only that, but the market has seen a rise in interest with initial coin offerings (ICOs), which is attracting a large number of investors.

It was earlier reported that in the first six months of 2017, over $1.2 billion in digital currencies had been risen through ICOs. So much so, that this figure outpaced venture capital funding in blockchain and bitcoin companies.

Yet, according to Charles Hoskinson, ethereum’s co-founder, who now runs research firm IOHK, they are a ‘ticking time-bomb.’

In an interview, Hoskinson, said:

“People say ICOs are great for ethereum because, look at the price, but it’s a ticking time-bomb. There’s an over-tokenisation of things as companies are issuing tokens when the same tasks can be achieved with existing blockchains. People are blinded by fast and easy money.”

Despite this, though, people are still flocking to ICOs. In July, it was reported that Tezos, a blockchain project, had announced the largest ICO to date after raising $232 million in bitcoin and ethereum coins. This outpaced the ICO for blockchain project Bancor, backed by Tim Draper of VC fund Draper Fisher Jurvetson, which raised $153 million in ether in June.

According to Goldman Sachs:

“Whether or not you believe in the merit of investing in cryptocurrencies (you know who you are) real dollars are at work here and warrant watching especially in light of the growing world of initial coin offerings (ICOs) and fundraising that now exceeds Internet Angel and Seed investing.”

Yet, while digital currencies are attracting a mammoth amount of interest, the bank adds that the market cap of all the cryptocurrencies equals to less than two percent of all the gold that is mined in the world.

Not only that, but while there are over 1,000 altcoins on the market, only around 800 of them actually have a market cap value. Yet, of those some have relatively small market caps. The smallest, at 817, has a market cap of just $18.

Boroujerdi and his team adds:

“There are currently over 800 cryptocurrencies out there, though just 9 have a market cap in excess of $1 billion.”

Bitcoin’s Value to Increase?

Many are projecting, however, that the value of bitcoin will increase.

Despite the recent user activated hard fork (UAHF), which saw the creation of bitcoin cash, bitcoin’s price hasn’t been affected. In fact the opposite of what was expected to happen, happened. Such a situation indicates that bitcoin has matured to such an extent that even a new digital currency won’t impact it.

According to Ronnie Moas, Standpoint Research founder, he believes that bitcoin will rise to $5,000 by 2018. He also predicts that ethereum will increase to $400 and litecoin will trade at $80.

Back in July, Moas indicated that bitcoin could reach $5,000 ‘in a few months,’ but has now extended the time he thinks this will happen. Confident as to where the market is going, he said:

“In my view, 10-15 years from now, the charts on a few of the top 20 names will look like the Amazon, Apple, Tesla, Facebook, Netflix and Goggle charts look today.”

Others believe that its value can increase even further. By 2020, a Wall Street analyst has made a bullish prediction and thinks bitcoin will be worth $55,000. With such varying prices, it remains to be seen who is the closest.

Featured image from Shutterstock.