Bitcoin Nears All Time High

Digital currency Bitcoin is $30 shy of hitting an all time high.

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Digital currency Bitcoin is within inches of hitting an all time high. According to Bitstamp, Bitcoin was at US $1,130.02 at market open on Thursday, while CoinDesk opened at US $1,122.19.

CoinDesk has recorded the highest price at $1,165.89 which was hit on November 30, 2013.

Due to the impending decision on the Winklevoss Bitcoin Trust?

Reuters speculated that the rise in Bitcoin is largely due to the coming March 11, 2017 deadline for the US Securities and Exchange Commision to make a decision on the Winklevoss Bitcoin Trust.

Venture capitalists Cameron and Tyler Winklevoss are behind this Bitcoin exchange-traded fund. If approved, Quartz Media wrote, “the ETF would enable institutional buyers to easily offer the cryptocurrency to consumers, potentially unleashing a flood of liquidity and demand for bitcoin into the markets.” Meaning, as Bloomberg puts it, “by approving it, the SEC would be legitimizing this product for retail investors.” If indeed approved, the Winklevoss Bitcoin Trust could be the first bitcoin ETF to be issued and regulated by a US entity.

Is the Bitcoin price correlated to the stock market?

Although not universally regulated, Bitcoin is largely seen as a safe haven asset, much like gold. Could this be the reason why the price of Bitcoin is rising?

Equity strategist Matt Maley told CNBC, “It’s become more mainstream, therefore it has become more correlated to the markets and I think it’s something to keep an eye on.” CNBC further wrote that in line with this thinking, the demand for bitcoin will also rise as economic activity increases.

INN asked Kevin Hobbs, CEO of Vanbex Group, to shed some light on the rise in the price of Bitcoin. In an emailed note, he said: “In my opinion bitcoin has built up a very solid base then it has ever had. We saw proof of this just recently when the Chinese government cracked down on the cryptocurrency exchanges in China and most of their largest exchanges halted withdrawals and they are still frozen and we only saw a small dip in the price of Bitcoin. It has now gone up to hit new all time highs. Also all the “Bad Actors” of 2016 seem to be long gone and forgotten.

I do think that the SEC decision on March 11th is also playing a large role in the rise in price as people believe that if they approve the ETF that there will be over $300 million USD that will be funnelled into it in the first week and that will dramatically increase the price in bitcoin because there is only a limited supply. If there is a negative decision we may see a slight decline in the price, 10-15 percent, but then I think it will regain its steam and stay on course to hit about $2,000 USD by year’s end.”

Kraken CEO, Jesse Powell, is not surprised by the rise in the price of Bitcoin. In an email, Powell said, “[G]iven the trifecta of bitcoin’s growing demand, limited supply, and reduction in volatility since its introduction, the cryptocurrency’s continued rise in price would come as no surprise. Also, a publicly traded ETF in the US makes bitcoin more accessible to a greater number of people and financial entities, which in turn would likely propel the cryptocurrency’s growth.”

One thing is for sure, INN will be watching closely on March 11 to see if investors will have a chance to jump on the the first US-regulated bitcoin ETF.

As of 4:00pm PST, the price was US $1,184.65 on Bitstamp.

Don’t forget to follow us @INN_Technology for real-time news updates!

Securities Disclosure: I, Pia Rivera, hold no direct investment interest in any company mentioned in this article.

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