The famous cryptocurrency Bitcoin has been in the media during the last months. In December 2017, it was the most important investment asset ever, and now that it is in a bear market, TV Shows like CNBC Fast Trader talk about ‘Bitcoin’s Funeral.’
The truth is that since the beginning of the year it cannot recover the price lost and the correction since its all time high is almost 70%. But there are several reasons that let us say that Bitcoin is not dead at all.
On CNBC Fast Trader, Brian Kelly, there are three important reasons on why Bitcoin will recover to levels near $10,000 dollars. First of all, he said that there is an imminent bottom in the market.
Currently, Bitcoin is being traded at the same level it was back in November 2017, 7 months ago. It is not clear which will be the bottom, but we may be near as Kelly explains. He refers to the basic rule of investing, if the asset is in a bear market, the best what an investor can do is enter, when it goes up, it is good to sell.
More importantly, Kelly stated that the Japanese government’s move to tighten regulations, clean up the cryptocurrency market, and legitimize the Japanese cryptocurrency sector is a positive development for the long-term, as it would prevent major hacking attacks like the Coincheck security breach and allow investors in the public market to gain trust in local exchanges.
He commented about it:
“Japanese exchanges were ordered to improve business conditions [by the government]. It’s actually a good thing. Short run it’s going to be a little tough because they’re stopping new accounts from coming in but actually they’re cleaning up the system. They’re making sure it’s more robust. Making sure it’s better for people. “
Last but not the least, it is important to mention that Mt. Gox will not be liquidating more assets until early 2019, which could help the market gain momentum in some occasions. During the last months, there have been important Mt. Gox sell-offs of tens of thousands of bitcoin, something that help the markets to crash. Kelly said,
“Mt. Gox is going into rehabilitation and they’re going to distribute the rest of the $1 billion worth of bitcoin. But here’s what is great about that, they’re not going to distribute it until quarter 1 of 2019. All of the sudden everyone thinks there is going to be a wave of selling. Not happening now,”
The three factors outlined by Kelly could fuel the next mid-term rally of BTC and the positive developments in the Japanese and South Korean cryptocurrency markets will enable the market to grow with stability and trust from investors, that will be largely beneficial in the long run.