Arnaud Masset
Swissquote Bank Ltd
Bitcoin’s price rose to a 15-month high during the European morning as it climbed towards the next key resistance that lies at $11,784 (high from February 21st 2018). Bitcoin showed impressive gains since the beginning of year, jumping from around $3,300 to more than $11,000. A performance of more than 230% in less than 6 months. Not bad for an asset that was doomed to die. Nevertheless, this amazing performance remains difficult to explain using a traditional approach based fundamentals. One can mention the geopolitical uncertainty, which has been mostly generated by Donald Trump, or the fact that central banks are slowly moving towards quantitative easing again. Indeed, the spread of dovishness among central bankers could be interpreted as a warning sign that a recession may be around the corner. The last explanation could be the announcement that Facebook is joining the crypto game with its cryptocurrency Libra. We doubt it is the main driver behind Bitcoin’s surge as it would mostly become a competitor. However, the Libra announcement definitely sends a clear signal that cryptocurrencies – or at least DLT – are here to stay.
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As Bitcoin passed the $10,000 threshold, investors started calling for a bubble again and made apocalyptic predictions about crypto prices. Nevertheless, we believe that there is still room for further appreciation as the overall sentiment towards crypto is improving and more and more business are accepting Bitcoin as a mean of payment. Nevertheless, the rise was quite aggressive and a pause would be more than healthy in the short-term.
This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
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