The Bitcoin price is above $10,000 again, after a strong 2019. It’s still a far cry from its December 2017 high of almost $20,000, but the real question is whether it can sustain its value this time around.
Bitcoin investors, enthusiasts and evangelicals desperately want the answer to that question to be a resounding yes, so that they can wipe the egg off of their faces after the “to the moon” predictions in 2017. But the truth, as it was 26 months ago, is that cryptocurrencies are unpredictable and volatile, just like any other financial asset. However, the difference between now and back then is that there are more regulations in place, people understand it better and, not only are massive companies like Facebook getting behind it, but so are government bodies.
The chairman of the Federal Reserve, Jerome Powell, gave advocates of Bitcoin a glimmer of hope earlier this week when, in a testimony before Congress, he hinted that the US might adapt a digitised dollar in the future.
Powell’s testimony was an indication that the Fed is closely monitoring China’s progress in their “belt and road” initiative, which is a highly ambitious project to displace the dollar as the global trade currency with their own CBDC (Central Bank Digital Currency), which would be a far more efficient method of conducting transactions with a currency that actually preserves its own value due to limited supply, similar to the way that gold does. It would effectively be akin to a return to the gold standard and the biggest economic development of the last 50 years… if successful.
China’s initiative is expected to roll out very soon and Powell’s statements indicate that the US is making efforts to keep pace. Although, he has expressed concerns over the potential for a digital currency’s challenge to attain trust from American consumers, due to the potential for monitoring transactions and locations. When asked whether the Fed was monitoring China’s developments, he answered in the affirmative.
“Yes, we certainly have that ,” Powell said, according to CoinDesk. “But they’re in a completely different institutional context. For example, the idea of having a ledger where you know everybody’s payments, that’s not something that would be particularly attractive in the United States context. It’s not a problem in China.”
His statement reflects a clear concern over not only China’s spooky authoritarian control over a would-be global trade benchmark, but also over the concerns surrounding Facebook’s Libra, which is massively opposed by lawmakers and the public in general, considering the tech powerhouse’s previous wrongdoings in terms of privacy compliance.
All this is occurring amidst a pretty widespread trend of businesses adopting cryptocurrencies as digital payment platforms. This includes the likes of Twitter CEO, Jack Dorsey’s payments company, Square, as well as the trading app that has become remarkably popular among millennials, Robinhood.
Bitcoin adoption is soaring and regulatory bodies are starting to keep up. No longer is the Bitcoin market the Wild West, and it’s not just cryptocurrency news publication bloggers and niche enthusiasts, but the most powerful financial authority in the world that is touting Bitcoin as the potential future of day-to-day transactions. This means that investors could have a lot to be excited about.
With that said, there is still an incredibly long way to go in Bitcoin’s road to widespread adoption and the market remains as unpredictable as ever – but the signs are certainly promising.