Cryptos Will Not Challenge The Dollar In Near Or Mid-Term Scenario, New York Fed Affirms
The Federal Reserve Bank of New York, in a completely not surprising move, affirms that cryptocurrencies will not triumph over the dollar so soon. According to a new research piece published by the New York Fed this week, cryptos may be mainstream but they could only be really significant in the long-term scenario.
According to the report made by the reserve bank, cryptos challenge traditional structures and are unlikely to meet important international roles now or in the medium term. This is nothing new as everybody knows that traditional financial institutions continue to downplay the strength of Bitcoin.
For instance, the Fed of San Francisco affirmed last April that Bitcoin lacked the characteristics to become a real currency and that it did not even pass the most basic tests. It is notorious how central banks are very often against Bitcoin or at least they believe that it is not as revolutionary as the community seems to think it is.
While some central banks from other countries are more prone to the idea of Bitcoin (like the one from Argentina, which is facing an inflation crisis right now), the ones from major financial countries like the United States are more convinced that they should not support Bitcoin.
Obviously, Not Everybody Agrees With The Fed
However, businesses tend to disagree with the central banks. For instance, the CEO of Twitter, Jack Dorsey, has affirmed that he deems that Bitcoin could become a global phenomenon, the “currency of the internet” in the near future, it just has to raise its adoption in order for that to happen.
According to him, Bitcoin is native of “internet ideals” and it is also a great brand that is very resilient. This could make the token be more accepted worldwide in a year or two and really skyrocket in usage, which would lead us to a new age of financial freedom, he believes.
The NY Fed has also used the occasion to affirm that USD is still to the “go-to fiat currency” of the world, despite having some shifts and rocky times lately. They believe that the dominance of the dollar will continue in the following years, an opinion that could not be more different from the ones in the crypto world.
Bitcoin still has a lot of issues to fix, that much is true. It is highly unlikely that the new token would take the dollar’s place in a year or two, but even looking at the mid-term scenario, there are reasons for people to be excited about. Bitcoin is strong even during the bear market and Dorsey was right about its resilience.
The truth is that the NY Fed may simply be wrong about the medium-term prospects of Bitcoin. The so-called digital gold may end up being accepted as real digital gold sooner than most people believe.
Bitcoin (BTC/USD) forecast and analysis on October 18, 2019
Cryptocurrency Bitcoin (BTC/USD) is trading at 7991. Cryptocurrency quotes are trading below the moving average with a period of 55. This indicates a bearish trend on Bitcoin. At the moment, cryptocurrency quotes are moving near the lower border of the Bollinger Bands indicator stripes.
Bitcoin (BTC/USD) forecast and analysis on October 18, 2019
As part of the Bitcoin exchange rate forecast, a test level of 8200 is expected. Where can we expect an attempt to continue the fall of BTC/USD and the further development of the downward trend. The purpose of this movement is the area near the level of 7260. The conservative area for Bitcoin sales is located near the upper border of the Bollinger Bands indicator strip at 8420.
Cancellation of the option to continue the depreciation of Bitcoin will be a breakdown of the upper border of the Bollinger Bands indicator stripes. As well as a moving average with a period of 55 and closing of quotations of the pair above the area of 8540. This will indicate a change in the current trend in favor of the bullish for BTC/USD. In case of breakdown of the lower border of the Bollinger Bands indicator bands, one should expect acceleration of the fall of the cryptocurrency.
Bitcoin (BTC/USD) forecast and analysis on October 18, 2019 implies a test level of 8200. Further, it is expected to continue falling to the area below the level of 7260. The conservative area for selling Bitcoin is located area of 8420. Canceling the option of falling cryptocurrency will be a breakdown of the level of 8540. In this case, we can expect continuation growth.
Bitcoin re-enters $8,000-zone, but what is its upside potential? – Confluence Detector
- BTC/USD went up from $7,998.50 to $8,077.50 this Thursday.
- The daily confluence detector shows two healthy resistance levels to overcome on the upside.
Following two straight bearish days, which took the price below the $8,000-zone, BTC/USD is on the course to recovery. Bitcoin had gone up from $7,998.50 to $8,077.50 this Thursday before it improved further to $8,087.40 this Friday. The hourly BTC/USD chart shows us that the market found intra-day resistance at $7,943.15 before it bounced up to $8,075. Since then, the price trended horizontally for a bit, negotiating with the $8,090 resistance line. The bulls managed to rally together to break past it and go up to $8,110, before correcting itself to $8,087.40.
BTC/USD daily confluence detector
The daily confluence detector has two healthy resistance levels at $8,190 and $8,260. $8,190 has the five-day Simple Moving Average (SMA 5) and one-week Fibonacci 61.8% retracement level. $8,260 has the SMA 100, one-day Pivot Point resistance two and one-day Bollinger Band middle curve.
On the downside, there is a support level of note at $8,065, which has the SMA 5, SMA 50, SMA 200, one-hour Bollinger band middle curve, one-day Fibonacci 38.2% retracement level and one-hour previous low.
Bitcoin could become store of value, as institutional interest increases
Institutional interest in Bitcoin has seen a significant rise in 2019, as several derivative financial products on top of Bitcoin have flooded the market. Active exposure of these investors to the digital asset realm has brought back the debate about whether Bitcoin is the new “store of value.” According to Grayscale’s managing director Michael Sonnenshein, there has been a certain shift in perception for sure.
Sonnenshein appeared on ‘The Scoop‘ recently to discuss the impact of institutional investor’s exposure to the digital asset class. The managing director of the firm believed that although Gold has been the standard store of value for centuries, and it made sense in the physical age, but given the rapid growth of the digital monetary age, Bitcoin for sure is challenging to become the new store of value. He explained,
“It is now nearly 2020 and we’re starting to ask investors with this question which is, what constitutes a store of value? It historically has been gold but that may have made more sense for a physical age. As we are in fully immersing ourselves now in this digital age perhaps gold doesn’t hold up as much as it once did as that store of value and perhaps investors need to think about a digital store of value such as Bitcoin.”
Institutional investors hold the key for Bitcoin and any other digital asset to gain mainstream adoption, and as of today they are more aware and learned about Bitcoin and its potential as an investment than ever before. More importantly, these investors are using Bitcoin as a hedge fund and store of value to diversify their investment portfolio as well as make quick capital gains on their investment.
The increasing interest of institutional investors is evident from the fact that GrayScale registered its highest gain in the last quarter with over $250 million raised from the investors, Binance has registered the highest daily volumes of over $700 million from its Binance futures platforms. Bakkt has launched its futures contracts recently while CME’s futures contracts year-to-date volumes have seen a significant rise over the past year.