Two details that matter about last week's bull run

A long-awaited rally or just more volatility?

After months of steady value decline, this past week was a strong one for cryptocurrencies – in fact, it was the best performing week in all of 2018.

With all major currencies up more than 10% in the time span of just 7 days a key question arises: is the market in another volatile period of ups and downs or is there anything different to it this time?

Two details that matter this time

Detail #1: Last week, George Soros, billionaire and investment legend, announced that he and his 26bn USD investment fund were getting ready for crypto investments for the first time ever. A few months ago, Mr. Soros had declared Bitcoin & Co. a “bubble”. This is the first time since its inception that “serious money” is flowing into the cryptocurrency market. “This new bull run will be the first institutional run”, says Olga Feldmeier of Blockchain-startup Smart Valor. Hedgefunds have only waited for the right time to get in on crypto trading. She assumes that Bitcoin will come back stronger than ever before - her estimation of Bitcoin’s value in 2 years is 100.000 USD. 

Detail #2: While over the past months, cryptocurrency regulation voices have become louder and louder globally, they are now becoming more and more silent. For instance, the head of EU’s banking regulator recently announced that its institution is not intending to regulate “coins themselves”. Also, South Korean regulators loosened its initially tough stance on cryptocurrency trade, while – just a few months ago – the tone was an entirely different one.

Both the “new wave of cryptocurrency investors” as well as the reduced risks of tough regulations on the cryptocurrency market were probably the main reasons for the recent increase in market capitalization overall. So, certainly, this “bull run” is different to previous ones. Possibly, this time, there are significant market gains to expect in the mid- to long term.

Author:

Manuel Ehmann