The use of Bitcoin as an alternative currency will lead it to successfully compete with gold. Bitcoin’s bullish rally is just beginning, says Paul Tudor Jones.
In recent days, the price of Bitcoin entered a cycle of volatility that some analysts had predicted, after months of relative stability. There was an increasing amount of individual and institutional demand. A healthy network did seem to be enough to initiate a determined rebound in Bitcoin’s price.
On October 21st, PayPal announced that it will allow using Bitcoin and other cryptocurrencies as a means of payment on its platform. This gave rise to a noticeable boost in the price of BTC.
PayPal’s announcement is initially aimed at users in the United States, who will not have access to the private keys of their cryptocurrencies in the new system. However, the impact is very significant due to the scope of this payment processor. With 340 million users and 26 million businesses, PayPal may be key to the massification of Bitcoin among consumers as the service spreads to other countries. If the number of users grows, PayPal may eventually grant them complete control over their cryptocurrencies.
The enthusiasm among bitcoiners for this bullish boom will inevitably provoke a shower of predictions like the 2017 bubble. On this occasion, the price dynamics are more leisurely than when Bitcoin first reached USD 13,000 on December 6th, 2017. At that time, Bitcoin grew by 53% in 11 days to reach its all-time high.
The manager of billionaire hedge funds, Paul Tudor Jones, had anticipated in May the various institutional supports for Bitcoin that occurred several months later. In recent days, he was more enthusiastic about the cryptocurrency as a store-of-value asset than about his statements at that time. He argues that the recent Bitcoin bullish rally is just starting.
An ongoing volatility cycle seems to have started for Bitcoin. In the last few days, Bitcoin’s price has risen by 13.8%, leading the total capitalization of cryptocurrencies to increase by 9.78%, to get closer to USD 400,000 million.
Data that Slow Bitcoin’s Performance, According to MicroStrategy
Michael Saylor, MicroStrategy CEO, told risk analyst Keith McCullough that data on Bitcoin from cryptocurrency exchanges and price portals are sometimes inaccurate or susceptible to manipulation. The executive warns that such practices could slow Bitcoin’s performance.
Besides, Saylor refers to the volatility of Bitcoin, which some people usually use against this cryptocurrency. He noted that a personal study of all types of assets in the last three months has provided him with evidence that traditional assets outperform Bitcoin regarding volatility in selected periods of the last theree months.
Bitcoin and Bretton Woods
On October 15th, Kristalina Georgieva, CEO of the International Monetary Fund, predicted that the world economy will decline by 4.4% this year. Given that the global crisis is becoming worse, the official said that the world was in “a new Bretton Woods moment.”
That mention of the 1944 agreement, which sought postwar monetary stability and elevated the US dollar to the status of a world reserve currency, seemed to suggest a new imposed agreement. On October 19th, the president of the US Federal Reserve confirmed that this agency is considering the implementation of a digital dollar. However, he said that they are not in a hurry.
Georgieva’s comments might not be disconnected from the intentions of the Fed. Besides, a new monetary system could include an agreement between the central banks to act jointly against Bitcoin. However, the new deal that the IMF suggests could involve continuing low-interest monetary and fiscal policies and resorting to inorganic money printing. It that happens, Bitcoin will remain attractive to investors as a hedge against the deterioration of the US dollar.
By Willmen Blanco
