The Mt Gox Trustee is DONE, BitFlyer is Decidedly NOT
The past two years were decidedly good for Bitcoin – as in the face of terrifying FUD events, it crossed every political, regulatory, and fork-seeking barrier it faced, to receive widespread mainstream attention as it surged from $400 to $20,000.
Yes, the final stage was frothy – care of hundreds of Wall Street “crypto hedge funds” and the lunacy of uneducated investors from South Korea to Main Street U.S.A. However, the subsequent price decline was NOT due to “bad news” derailing Bitcoin’s use case propositions; as opposed to altcoins - of which, the vast majority have been exposed to have none. In fact, 2018 has seen the least amount of Bitcoin FUD of any of the three I have been involved; and yet, it has been subjected to a brutal bear market. But hey, that’s how financial markets have always worked…irrationally, on both the up and downside.
Unfortunately, the mainstream got involved in the latter stages of the price surge, with little or no understanding of why Bitcoin rose…or why altcoins joined the party. Which is why, now that the marginal investment is leaving, the amount of actual Bitcoin knowledge is little more than a year ago; which is to say, VERY little – which in turn, is why I KNOW we are still in Bitcoin’s very early days.
Bubbles are always followed by bear markets – the bigger the former, the bigger the latter. And crypto was undoubtedly one of the biggest bubbles ever – though in my view, 90% of the bubble behavior was not in Bitcoin, but altcoins. However, the collateral damage has been unavoidable – even if $6,000 is a price that a year ago, was considered a pipe dream that might take years to be seen.
Thus, despite still holding above the $6,000 level – where arguably, the bubble commenced when institutions started piling in in November; we are amidst ugly bear market trading conditions…particularly in the second and third tier praying for Bitcoin to reverse, lest they permanently plunge to near-worthless status.
That said, it cannot be overemphasized that from a news standpoint, things couldn’t be better – as the Bitcoin network has never been larger, more secure, or immune from centralized attacks. This, at a time when global money printing, fiat currency volatility, debt and political uncertainty are near record levels – with nowhere to go but up.
In fact, if it weren’t for the “horrible” news that BitFlyer, Japan’s largest crypto exchange, will not accept new clients until it creates the stronger AML/KYC processes demanded by Japanese regulators, the price would have likely surged, rather than plunged today…on this morning’s BIG news that the Mt Gox Trustee will NOT be selling anymore Bitcoin.
Which, I might add, was exactly what I opined last month, when fears of renewed Mt Gox-related selling were rampant…
To the contrary, the “horrible” news today regarding BitFlyer – which frankly, is barely news at all – is being used as an excuse to sell by deep-in-the-red investors who are becoming more dispirited by this year’s ugly trading action with each passing day. Fortunately, those who bought in early can wait the bear market out – but for those that didn’t, capitulation is the order of the day. Clearly, fear of what might happen at $6,000 is dominating traders’ attention, damn the fundamentals. Which is why, if you can, HODLing is the best Bitcoin investment strategy.
I assure you, BitFlyer isn’t going anywhere – given Japan’s extremely pro-Bitcoin stance, and the fact that 60% of global Bitcoin trading volume is in Yen; nor is Bitcoin, whose use cases only growth stronger with each passing day. The only question is where we bottom; if we haven’t already; and when.