Bitcoin’s price limbered up slightly from yesterday but still failed to pauze the $12,000 barrier. According to Coindesk’s index, a single bitcoin could set you back by $11,222.71, an increase of Trio.53% from its price 24 hours ago, at 13:55 UTC.
The mostly sideways movement te bitcoin’s price occurred even after UBS Chairman Axel Weber told Bloomberg at the World Economic Forum that the handelsbank will not suggest bitcoin investing services to clients spil government regulation of the cryptocurrency might result ter a “massive correction” and an implosion te its price.
Gains for other cryptocurrencies outpaced that of bitcoin. Among the top Ten most-traded coins, Stellar’s Lumens wasgoed the thickest gainer, rising by 26.13% to trade at $0.57. The cryptocurrency, which shares technology with Ripple’s XRP, might soon be on payments processor Stripe’s network.
At 14:09 UTC, the overall market capitalization for cryptocurrencies wasgoed $552.7 billion, up from a low of $515.Five billion earlier this morning.
Ratings For Cryptocurrencies
The volatility of cryptocurrency markets has stumped even the best analysts. Now, there are efforts to bring some science and method to the madness.
Florida-based hard Weiss Ratings released a ratings assessment of cryptocurrencies, assigning letterteken grades to them, today. Bitcoin received a C+ grade and Ethereum, the 2nd most valuable cryptocurrency, received a B. According to the rock hard, bitcoin has excellent security and “widespread adoption.”
It did not make clear whether that adoption related to bitcoin’s use spil an investment voertuig or spil a medium of exchange. Industry gegevens indicates that bitcoin is fighting to build up traction spil a medium of exchange. According to the company’s press release, none of the cryptocurrencies listed te the markets obtained an A grade. That is understandable, given the market’s nascent nature.
Ter an vraaggesprek with Marketplace, Martin Weiss, the voorzitter of Weiss Ratings, said his rigid had used “thousands of gegevens points” and four factors to determine the ratings. The very first two are risk and prize indices, which are based on price risk and profit potential.
Then, there is the technology index, presumably an assessment of a coin’s underlying blockchain and its future potential. Eventually, the hard also uses a “reality test” of the technology’s applications ter the real world “to make sure that people are actually using it and it truly works,” said Weiss.
Admittedly, that’s a pretty broad set of criteria, and most of it fails to provide clarity. This is especially significant spil the jury is still out on factors driving price movement te cryptocurrencies. Just yesterday, the Outline published an article detailing a pump-and-dump scheme on a messaging toneel. (See also: Fraudulent Trading Drove Bitcoin’s Price From $150 To $1,000 Ter Three Months.)
Also, the “reality test” of the technology’s applications will take a long time to assess, considering the industry’s nascent nature. And it is unclear how the rock hard will treat technology prospects for offshoots or forks, which essentially use the same blockchain spil their parent currency.
Others te the industry also have questions. “It’s odd that Weiss is touting the fact that they don’t take compensation for their services,” says Jay Blaskey, digital currency specialist at BitIRA, adding that it may not be spil applicable for cryptocurrencies spil it is for credit rating agencies.
Still, it is a begin. According to Blaskey, the ratings are a sign of continued maturation for cryptocurrency markets. “I expect this to be the very first of many more systems to come, especially spil more and more participants te the financial ecosystem integrate thesis assets into their business models,” he said.
Diverging Perspectives About Bitcoin’s Utility
Is bitcoin an asset or a payment network?
That question has mystified analysts, investors, and users of the cryptocurrency. It also has an utterly significant bearing on factors driving its price movement. Dan Ciotoli from Bespoke Investment Group has predicted a price target of inbetween $20,000 and $30,000 by the end of 2018 for the cryptocurrency.
“The driver that I think is going to bring bitcoin up te 2018 is bitcoin-denominated commerce,” Ciotoli told CNBC, adding that the success of Lightning Network, a 2nd layer to bitcoin’s blockchain to enable commercial transactions, has a big role to play ter that assessment. If the network fails, Ciotoli’s price target falls to $Five,000. Clearly, he has laid his money on bitcoin’s future spil a payment network for daily transactions. (See also: What Is The Bitcoin “Lightning Network”?)
The team at Stripe, a payment processor, may not share Ciotoli’s assessment. The San Francisco-based startup, which discontinued support for bitcoin yesterday, identified high transaction fees and price volatility spil reasons for its decision.
“Over the past year or two, spil block size thresholds have bot reached, bitcoin has evolved to become better-suited to being an asset than being a means of exchange,” Tom Karlo, a product manager at Stripe, wrote ter a postbode. Stripe processes “billions of dollars” ter payment processing volume, so they know what they are talking about. (See also: Stripe To End Bitcoin Support.)
Ultimately, there’s Visa, the world’s largest payment processor. Its CEO Alfred Kelly told CNBC last week that bitcoin’s price volatility made it unfit spil a payment mechanism. Instead, he said he viewed the cryptocurrency spil a “speculative commodity.”
Investing te cryptocurrencies and other Initial Coin Offerings (“ICOs”) is very risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest ter cryptocurrencies or other ICOs. Since each individual’s situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties spil to the accuracy or timeliness of the information contained herein. Spil of the date this article wasgoed written, the author wields petite amounts of bitcoin.