Many are wondering if we’re seeing the beginning of a 2019 Bitcoin bull run.
After a bloody 2018 for the world’s first and most highly valued cryptocurrency, Bitcoin is starting off 2019 with some major traction on what appears to be quite solid ground.
Is This The Start of A 2019 Bitcoin Bull Run?
- Bitcoin’s price reached a 40-day high of USD$4,000 Tuesday.
- Bitcoin transaction volume reached a 9-month high as well.
- The total market value of the cryptocoin industry surged $15 billion in 48 hours.
The beginning of another Bitcoin bull run is far from a certainty. But it might not be a coincidence that Bitcoin’s price has so much up power right about now.
Here are 10 strong fundamentals underlying Bitcoin at the time of its current ascent:
1. Major Altcoins, Ethereum, EOS Are On Parade Too. It’s Not Only A 2019 Bitcoin Bull Run.
The market value of Ethereum rival EOS is leading the charge with a 25% increase in its market capitalization over just two days. Ethereum (ETH) grew by 10% over the same short time period while Ripple (XRP) posted similar gains.
The crypto space is as legendary as other high stakes, pioneering enterprises throughout history for conflict and drama. There are some who believe that altcoins and Bitcoin compete for users and capital. But these products are economic complements, not substitutes.
The cryptocurrency market overall is still so much smaller than the amount of money flowing through the hallowed (laugh out loud) halls of institutional financiers.
It’s smaller yet than the global markets for every other imaginable kind of valued goods that people buy instead of financial instruments to make payments, save, or invest.
Bitcoin and Ethereum aren’t in competition with each other. They’re in competition with PayPal, Bank of America, stocks, bonds, precious metals, real estate, and $5 cups of coffee.
As the historical trends have shown, the success of one cryptocurrency generates interest and demand for other cryptos as well.
2. If It Happens The 2019 Bitcoin Bull Run Might Be Institutional Finance’s Fault
Crypto made more progress in institutionalization in 12 months than in previous 9 years.
– $40M from 2 public pension funds in the U.S.
– $237 million invested by institutions through Grayscale
– Fidelity and ICE building infrastructure
– Major exchanges operating as custodians
— Joseph Young (@iamjosephyoung) February 17, 2019
“First they ignore you, then they laugh at you, then they pathetically try to copy you, then they throw up their hands and starting hodling bitcoin, then you win.” -Not Gandhi
Coin watchers have long said crypto has arrived when institutional finance begins to make serious moves into the space.
Big finance will open the floodgates of capitalization, institutional expertise, and the aura of officialdom, infusing the crypto industry with so much value, that many expect its market cap will dwarf its previous peak at the height of the bubble in 2017.
Well, 2019 is the year institutional finance starts hodling as much BTC as it can get.
NASDAQ Adds Bitcoin and Ethereum Indexes
On February 11 NASDAQ, the second largest stock exchange in the world, launched indexes for Bitcoin and Ethereum, showing just how seriously Wall Street is taking “digital assets.”
This means NASDAQ is probably moving forward quickly with an option to trade Bitcoin futures, a new financial product it teased throughout 2018.
Intercontinental Exchange, the company that owns the New York Stock Exchange announced last year it would be working with Microsoft among other major partners to create a global cryptocurrency exchange.
At the end of December ICE announced it had raised $182 million for Bakkt from a prominent group of venture capitalists and investors.
Big banking is so keen to get into the cryptocurrency game and expects such great things out of crypto that earlier this month the NYSE Chairman and Founder and CEO of ICE, Jeff Sprecher calls Bakkt his company’s moonshot bet.
Fidelity Digital Assets
Last October, Fidelity Investments, the Boston-based financial services company with $7.2 trillion worth of assets under management for 27 million clients, announced it would be launching a Bitcoin custody service called Fidelity Digital Assets.
At the end of January, Fidelity caused a stir when it announced a March launch of Fidelity Digital Assets. That day news leaked that the cold storage function of Fidelity’s new Bitcoin custody service is already live, with some assets currently under management.
JP Morgan Coin
Although its billionaire CEO, Jamie Dimon has had little but scorn for Bitcoin over the last couple years, JP Morgan lent Bitcoin some massive credibility when it launched JPM coin this month (which is definitely a fake cryptocurrency).
Imitation is the sincerest form of flattery. And as they say, if you can’t beat ’em, join ’em. By attempting to join the cryptocurrency revolution, JP Morgan tacitly admitted it can’t beat ’em.
3. Exchanges and Wallet Services Have Developed Unprecedented Crypto Market Liquidity to Fruition
Not long ago it wasn’t as easy to purchase cryptocurrencies as it is today. The exchanges and wallet custody startups have been hard at work to change that and the results are showing.
Square Cash App Lets Users Buy and Sell Bitcoin
Earlier this month Jack Dorsey revealed that Square Cash (also known as Cash App), “one of the most widely utilized mobile payment applications in the U.S. market, became the 2nd most popular free mobile application on the Apple App Store.”
A little over a year ago in November 2017 Square- er- Cash App (Which is it again? Doesn’t matter.) added Bitcoin buying and selling, and a wallet custody service.
(So Dorsey can keep users’ bitcoin in his walled off but vast ecosystem, and in exchange make it very easy for its 7 million active users to buy and sell Bitcoin and swap it for Dollars.)
It’s a way someone in Jack’s position with his successful Cash App can get his hands moving a lot of bitcoin, and it appears he’s been well rewarded for investing in Bitcoin.
13 months after adding Bitcoin to his payment platform, even as the U.S. equities market faced a broad correction, Square Cash is valued at $29 billion, nearly twice as much.
Binance Allows Users to Buy and Sell Cryptocoin with Credit Cards
The world’s largest crypto exchange, Binance, is flush with massive profits from its operations in 2018, estimated from buybacks of its BNB token to total $446 million.
In January Binance, the most voluminous crypto trading exchange on the planet announced it would allow users to buy crypto with credit cards using Visa and MasterCard.
Not competition, just more choices. And growing the industry together. https://t.co/xtQ27caX6j
— CZ Binance (@cz_binance) February 9, 2019
4. Second Layer Technologies Are Creating More Channels for A Bitcoin Bull Run To Flow Through
One drawback of Bitcoin is congestion on the network. But that’s a feature of its insistently deflationary monetary design. It makes Bitcoin more precious, harder specie.
Still, the overwhelming demand for greater liquidity in the use of Bitcoin as an instrument for daily small cash payments has driven the development of many tributary channels of liquidity carefully crafted by developers out of second layer technologies.
A Lightning Network startup announced just this week that it will now accept Bitcoin payments nearly instantly (30 seconds) over the Lightning Network for mega ultra super low fees, and deliver you a Domino’s pizza in 30 mins.
5. Currency Crises Will Have Played No Small Part In A 2019 Bitcoin Bull Run
A country that has been absolutely wrecked to its foundation by Chavismo communism, Venezuela is facing political upheaval and a currency crisis that has stricken the South American country with disastrous hyperinflation.
That’s led to an insatiable demand for Bitcoin in Venezuela.
6. 2019 Bitcoin Bull Runners Have More Bitcoin ATMs Than Ever to Buy Bitcoin And Counting
On top of increased liquidity through more points of sale for cryptocurrency on exchanges like Binance and custodial wallet and payment services like Cash App, Bitcoin ATMs are making it easier to buy Bitcoin than ever before.
Chicago just got 30 new Bitcoin ATMs, bringing the Windy City’ total number of automatic Bitcoin tellers to 100. Philadelphia as another city with about 100 Bitcoin ATMs at this point.
7. More Governments Are Getting Into Crypto in 2019
Venezuela Regulates Cryptocurrency
It’s very fortunate for the Venezuelan people that their repressive government isn’t moving to block their exit from its ruined Bolivar, something governments facing hyperinflation have done in the past. Venezuela is issuing regulations and fees instead.
Paraguay Makes Big Bet on Cryptocurrency
A major hub of hydroelectric renewable energy, Paraguay’s government completed talks in November with the South Korea-based Blockchain Technology Foundation to turn its cheap energy into bitcoin.
The government of Paraguay and the Blockchain Technology Foundation have ambitions to build the world’s largest cryptocurrency mining farm.’
Their end game is to then leverage the influence and command of digital financial assets that would bring to build the world’s biggest crypto exchange on top of it.
8. Major Retailers Are Stampeding Off to A 2019 Bitcoin Bull Run
“A major update for its mobile app platform Rakuten Pay, which is set to release later next month with the potential inclusion of cryptocurrency payments in conjunction with fiat.”
Last August, Rakuten acquired a cryptocurrency exchanged, Everybody’s Bitcoin for $2.4 million, a vertical expansion that put Rakuten into position to make this month’s announcement. Hopefully, Amazon‘s watching.
9. Silicon Valley Is In A 2019 Bitcoin Bull Run For Sure. These Bulls Were Running In 2018 Too.
Silicon Valley has continued to be a wellspring of highly talented tech business superstars who are quite enthusiastic about Bitcoin’s prospects in the near future and have fueled the industry’s growth with development and capitalization.
Despite setbacks, they are also one of the many teams working with the SEC to launch a Bitcoin ETF (exchange-traded fund) in the near future.
As noted above, Twitter and Square Cash App Founder and CEO Jack Dorsey have been an intransigent Bitcoin bull all throughout the entire 2018 bear market.
The legendary Silicon Valley venture capitalist Tim Draper who has racked up a personal net worth of $1 billion to his credit in terms of his ability to pick tech winners, believes Bitcoin’s price will reach $250,000.
Peter Thiel’s small team of visionary developers and business people, who included Elon Musk after a merger, were trying to create something like Bitcoin, an alternative to the U.S. Dollar, when they created billion dollar baby, PayPal.
So many of them went on to found more billion dollar babies like Tesla, SpaceX, YouTube, LinkedIn, Yelp, and Palantir Technologies (Peter Thiel’s billion-dollar data analytics company, with an IPO coming up in 2019), that people call them the PayPal mafia.
Thiel is a major Bitcoin bull and is hodling. In January of 2018, Thiel’s Founders Fund bought between USD $15 million and $20 million worth of bitcoin.
Vitalik Buterin, who invented Ethereum, went to work on what is now the world’s second most valuable cryptocurrency (after recently overtaking XRP) after receiving the Thiel Fellowship in the amount of $100,000.
10. Lower Bitcoin Volatility Could Support A 2019 Bitcoin Bull Run
At Forbes, Charles Bovaird asks, “Has Bitcoin Entered A New Normal?”
One of the most resounding criticisms of Bitcoin as a financial instrument for small daily cash transactions is that its price is too volatile to serve this function. This is also why many pundits have said it’s not “a real currency” or “not real money.”
Although the trade in Bitcoin has been a bumpy ride because of the waves of speculation that have pushed nascent open source decentralized payments and banking platform to spectacular highs, its price is stabilizing.
The volatility of Bitcoin expressed as the average of the standard deviation of daily returns on bitcoin has been decreasing over the currency’s first decade of existence.
Click here for a real-time bitcoin price chart. Images from Shutterstock.