Tracking Bitcoin's highs and lows

Tracking Bitcoin's highs and lows

The volatile nature of bitcoin trading has been brought into the spotlight by recent sharp rises and falls in the cryptocurrency after Mark Zuckerberg's grilling in Congress was countered by positive sentiment from China about blockchain and a future central-bank backed currency.

The price of bitcoin fell to a five-month low of less than $7500 after Mark Zuckerberg's interrogation in front of Congress, but subsequently rallied past the $10,000 barrier overnight on October 25th, bringing respite from over a month of bearish activity.

Zuckerberg's attempts to assure Congress that Facebook would not support Libra's launch without the approval of all US regulators engendered worries over greater regulatory scrutiny among crypto investors, triggering this initial sell-off.

Away from Washington, commentators believe the main driving force behind Bitcoin's sudden recovery was the positive endorsement for blockchain technology made by President Xi Jinping.

"There has apparently been a large influx of searches for 'Bitcoin' and 'blockchain' on WeChat in China," says Danny Scott, CEO of bitcoin exchange, CoinCorner. "The China news does at least correspond with the price movements, so this would make some logical sense."

Another factor is the positive signs from Bakkt, which last week announced its long-awaited options contract for Bitcoin futures will be launched on December 9th.

There is a belief that Bakkt, an affiliate of the Intercontinental Exchange which also owns the New York Stock Exchange, will see large volumes of money enter the crypto space thanks to its appeal to institutional investors.

Scott concludes: "Taking each of these angles into account, it's possible that any or all of them had an impact on the price, but as I’ve always said, it’s very difficult to pinpoint one distinct reason when it comes to bitcoin."

The recent highs and lows will reinforce the views expressed by financial regulators in repeated warnings to consumers  about the inherent risks in bitcoin trading.

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