This week on Planet Bitcoin - 21 July 2016

Friday 22 July 2016

TL;DR sleepy summer markets

Bitcoin continues to do little of interest in the wake of the Halving, with markets snoozing in the warm weeks of the summer holiday. August is approaching, traditionally a time of tedium on the broader markets, and bitcoin seems to have got a headstart on it.

Chart

For all the talk of price rises and crashes, the markets seem to have done the thing that fewest people predicted: basically nothing. We’ve seen fluctuations of a few dollars here and there, but bitcoin has remained within a range of around $650-680. That is towards the top of its all-time price range (as ever taking into account the effect of inflation and increased coin supply, meaning that each coin needs to be worth less to reach the same market cap).

For holders, this is hugely encouraging, because what we’re seeing at the moment can in no way be characterised as a bubble. There are no sharp movements, no panic buying or selling. Periods of stability in bitcoin can generally be viewed positively, since they represent the market consolidating - and they tend to end with an upward movement. In fact, the Independent ran an article earlier this month that bitcoin briefly became more stable than the Pound, following the referendum result. 

Whilst lower volumes are being traded now as the markets calm, it’s easier to manipulate the market or for the price to move suddenly, but given the smooth sailing at the moment it bodes well for the medium term and the end of the year.

Around the world

As ever, though, it’s been an eventful week on the regular markets. The ECB held off making any adjustments to monetary policy, just as the Bank of England had done the week before - but these were seen as events in their own right, because the high expectation that there will be further easing makes it highly likely that must happen next month. A cut in interest rates and more QE is on the cards for both. The good news is that the Eurozone is faring slightly better than expected post-Brexit, as is the UK economy; although there will be implications, it currently appears they will be less severe than many were predicting. The Bank of Japan is also mulling further stimulus, which would boost stock markets at the expense of the currency.


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