This Week in Cryptocurrencies-2/9/18

By Matthew Zeman | February 9, 2018

The recent slide in cryptocurrencies may or may not be over, but lower prices have not deterred investors from buying and potential investors from seeking to learn more about these forms of digital money.

Cryptocurrency Education in Universities

In another sign that the cryptocurrency boom may be here to stay, some U.S. universities are now offering education about these forms of currency. According to a recent article by nytimes.com,

“Several top schools have added or are rushing to add classes about Bitcoin and the record-keeping technology that it introduced, known as the blockchain.

Graduate-level classes this semester at Carnegie Mellon, Cornell, Duke, the Massachusetts Institute of Technology and the University of Maryland, among other places, illustrate the fascination with the technology across several academic fields, and the assumption that it will outlast the current speculative price bubble.”

There is a key phrase in there: “The assumption that it will outlast the current speculative price bubble.” What does this mean? It means that some very bright minds believe that these digital forms of money are in fact here to stay, and that despite some expected growing pains they may become an important piece of the global payments system. As with any new technology, it is important to take a long-term view, rather than just examining the short-term profit potential.

Are Cryptocurrencies in a Bubble?

The extraordinary price gains seen this year in some cryptos, such as Bitcoin, do have a “bubble” feel to them. That bubble, however, now appears to be working itself out, as prices have deflated sharply in recent weeks. The recent downside in values may actually be a good thing, and may allow for a more sustainable run higher in price.

The steep climb in prices was also likely a major factor in attracting more attention from regulators. It certainly appears now that additional regulation will be implemented for cryptos, but that regulation may be a good thing. Further regulation may clamp down on excessive speculation in the crypto markets, and may be very beneficial.

The Week in Cryptocurrency Prices

Bitcoin: This cryptocurrency saw declines from over $9000 to around $6000 this week, before seeing a powerful bounce. Buyers appeared comfortable getting long around $6000, and the market has since moved back up to the $8400 level. A further bounce higher in Bitcoin could potentially lead the entire sector higher next week.

Bitcoin Cash: This currency hit a bottom around $778 this week, before seeing a significant reversal. The market found willing buyers on the dip, and has since surged some 40 percent to around $1290. The strong rebound could potentially point to further upside next week.

Ethereum: This crypto saw steep declines earlier in the week, falling from almost $1000 to less than $600. Buyers liked the dip, however, and it has also seen a strong rebound from the recent lows.Like other cryptos, the notion of increasing regulation has weighed on the currency.

Ethereum Classic: This currency has seen price action from a l,ow of around $15 to a high around $25. This crypto appears ready to end the trading week on solid footing, near the week’s highs. A strong finish could possibly point to additional gains next week.

Ripple: This currency dropped from over $.90 to less than $.60 this week, before finding interested buyers. Like other cryptos, it has seen a strong rebound off the lows, and is set to finish the week on a strong note around the $.92 level.

Litecoin: This crypto has spent much of the week around the $150 level, although it did take a dip to less than $120 earlier in the week. The market does, however, remain in a downtrend on the long time frames, and may need to see a stronger rebound before attracting more buyers.

Cryptocurrencies are undoubtedly going through some growing pains. The recent ups and downs should not come as a surprise, however, and may simply be a necessary process as these currencies look to become more mainstream. Recent selling in these currencies, along with the subsequent bounce seen in many of them, would seemingly indicate that many investors are prepared to buy and hold these currencies for the long-run. That being said, the crypto markets may remain susceptible to further selling and even sharp rallies as investors attempt to make heads or tails of new regulations and market developments.

The fundamentals for the cryptocurrency market remain as strong as ever, and long-term, patient investors may potentially reap significant rewards as these currencies continue to take steps in the right direction.

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