This week on Planet Bitcoin - 22 October 2015

Friday 23 October 2015

TL;DR We’re on the up, and there’s plenty of good news about too.

It’s been a much more interesting week for bitcoin. After coming off a promising spike up to the low $270s last weekend, bitcoin fell back somewhat but failed to drop below $260. Instead, it bounced off the $260 line a couple of times and headed higher, this time rising to over $275 - with a brief spike up to $280.

Weekly chart

This is the highest point we’ve seen in two months, and some welcome indication of returning confidence. Volumes are up considerably, as is volatility, after such a long period of tedious stagnation. Optimism appears to be returning to the community for the first time this year.

A rising tide lifts all ships, but the alts have nevertheless had a tough week. Though they are invariably pegged to bitcoin, as they trade against BTC on the exchanges, when bitcoin rises the alts tend to fall, as speculators dump them to make sure they get in on the BTC rise. This week has proven absolutely devastating for several alts, particularly Ethereum and BitShares. Ethereum has crashed 20 percent in a week, and BitShares almost as much (though, in the last few hours, ETH has bounced around 25%; it remains to be seen how long this will last). Nxt, too, has seen heavy falls, though in this case it is less due to widespread collapse of confidence as to a single large stakeholder cashing out, putting a huge wall at a historically low price. The Nxt community quickly grabbed all there was to take, since which time the price has bounced back almost 10 percent.

Around the bitworld

Reasons for bitcoin’s rise might include Gemini, the Winklevii’s new regulated exchange, which should be getting under way by now. But there is also evidence that China is showing renewed interest in bitcoin, with the major Chinese displaying higher volumes than they have for some time - always something to be taken with a pinch of salt, but nevertheless interesting. The struggling Yuan may provide some explanation, if so. It’s one to watch: volume from Chinese crypto exchanges comes and goes overnight, and manipulation is rife.

Other good news includes Europe’s recent ruling on VAT. Currency exchange involving bitcoin should be exempt from VAT, just like other currency exchanges, the European Court of Justice stated. Essentially, this frees bitcoin businesses from the concern that they might not be able to use digital currency as cash. 

Further closure to the Silk Road saga comes as one of the agents involved in the case was jailed for six years for stealing over $800,000 of bitcoin, as well as obstruction of justice for collaborating with Ross Ulbricht, who is himself serving a life sentence. A further boost to the bitcoin price may have come through publicity ahead of the final auction of Silk Road coins. On 5 November some 44,000 bitcoins recovered from Ulbricht's computer will go under the hammer.

Lastly, Adam Draper - CEO of Boost VC and son of bitcoin enthusiast Tim Draper, who snapped up a previous tranche of auction coins - has said that investors are happy to discuss blockchain but don’t like the word bitcoin, due to its associations.

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