UK Bank says Bitcoin Rise was “Viral” but Bulls Predict new Highs in 2018

A recent story in the Independent compared Bitcoin’s price surge in late 2017 to an “infection”, going on to say that it’s low, seemingly stagnate, value is a result of that infection being treated and will serve as the new norm.

Barclays say Bitcoin has Acted Like a Disease

The price of Bitcoin has been fluctuating around the $7000 mark, falling from a 2018 high of $11,500 in March and it’s all-time high of around $20,000 in December of 2017. Some experts at Barclays are warning that it might not come back up.

The Independent reported that analysts at UK’s Barclays Bank created a model in order to examine the rise and fall of Bitcoins value on the market. The end result of the experiment was that the price of Bitcoin charted like a viral disease that has now been treated.

Barclays’ economists explained their methodology saying  “We developed a theoretical model of an asset price with a pool of speculative investors and compared it with actual bitcoin price behavior to see what it might imply for the future dynamics”

The conclusion of the experiment as reported by Barclays was that “The model has clear parallels with compartmental models of the spread of an infectious disease in epidemiology.”

From this model the analysts have extrapolated that Bitcoin will continue on the “downward spiral” it’s been on since the beginning of the year while at the same time hesitating to predict it will fall below $6,000.

Bulls Aren’t Buying Viral Explanation

The Independent article balances Barclays’ prediction by including the more bullish predictions of former COO for Skype Micheal Jackson who sees a very different future for Bitcoin.

The Independent quoted Jackson as saying that the recent price stagnation of Bitcoin “will appear trivial” by the end of the year. He went on to explain that,

“The price has been driven by speculators and they suddenly got cold feet but there’s considerable effort going on behind the scenes, including new underlying technology that is powering faster transactions,”

Jackson speculated that the increase of regulation will ease consumer risk and optimistically predicted: “I see no reason why bitcoin shouldn’t fulfill its dream.”

Meanwhile, Funstrat’s expert analyst Tom Lee has linked the stagnated price of Bitcoin to the looming April 17 tax date in the US. Lee notes that US investors in cryptocurrency owe an estimated $25 billion in capital gains tax.

Lee told CNBC recently that although the cryptocurrency market has lost some fifty percent of its value in the first quarter of 2018 those who capitalized on its meteoric rise in 2017 now owe taxes on their profits.

According to Lee, “historical estimates are each $1 of USD outflow is $20-$25 impact on crypto market value.” Ever bullish Lee concludes that “[u]ltimately, we expect Bitcoin to find footing after April [17], tax day.”


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