Bitcoin Update: Good News & Bad for Investors

bitcoin money

Martin Green

Monday, February 12, 2018 2:30 PM GMT

Monday, Feb. 12, 2018 2:30 PM GMT

Bitcoin grew 1,500% in value during 2017, making several individuals rich, but it has endured a terrible start to 2018. What to expect in the immediate future?

The volatility of Bitcoin was highlighted this past weekend when the cryptocurrency climbed to a high of more than $9,000 but then plummeted to just over $8,000. Bitcoin grew 1,500% in value during 2017, making several individuals rich, but it has endured a torrid start to 2018. It plunged from an all-time high of $20,000 in December 2017 to a low of $6,000 at the start of this month. It is showing signs of recovery, but due to the global nature of the cryptocurrency, it is at the mercy of fluctuations caused by any market across the world.

In the past week we have seen the Arizona Senate pass a bill to allow tax payments in Bitcoin, representing a boon for its advocates. On the flip side, Russian security officers have arrested several scientists working at a top-secret Russian nuclear warhead facility for allegedly mining Bitcoin. This sort of news is likely to continue apace in 2018, and it makes Bitcoin a fascinating but slightly risky prospect. Last year it turned investors into billionaires, and quickly reduced them to mere millionaires last month.

As many SBR readers know, Bitcoin can be a valuable tool to sports betting fans due to the speed, convenience, security and anonymity it offers. In many ways, it represents a return to the golden age of sports betting, which is why SBR's top-rated sportsbooks have put it at the heart of their strategies, and a range of Bitcoin only books have emerged. Because Bitcoin is specifically designed for online transactions that pay no heed to national boundaries, it cuts out third party involvement, so you get to keep more of your winnings. Deposits and withdrawals are typically quicker, and the anonymity brings several advantages to US players. There are no credit card details on unsecured web forms, and all the sportsbook will see is a transaction code. It is quick, easy, convenient, secure and anonymous, which is brilliant news for players who are sick and tired of wrestling with the cumbersome processes of many online sportsbooks using fiat currencies.

But the big risk is the currency’s volatility. If its value drops 5% in one day and you are betting with Bitcoin, you can instantly lose a chunk of your winning margin. You need to be pretty nimble and agile at converting it back into dollars quickly upon winning if you want to dodge the vagaries of its fluctuations. And it pays to stay on top of all the trends within Bitcoin, which SBR will round up for you on a weekly basis going forwards.

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#Bitcoin eyes key hurdle at $9,017
(Data via Coinbase) https://t.co/G4aF3fEscj pic.twitter.com/OI089zlHcp

— CoinDesk (@coindesk) February 12, 2018
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Experts have predicted that Bitcoin will become the dominant currency for online gaming in 2018, and that it will account for 80% of US transactions. But a word of warning was sent out by Yves Mersch, a member of the European Central Bank’s executive board, who said: “At these speeds, if you bought a bunch of tulips with Bitcoin they may well have wilted by the time the transaction was confirmed.”

It has lost more than half its value since December, and Nicholas Gregory, chief executive at Commerce Block, warned: “Once Bitcoin starts to behave more in tune with traditional foreign exchange markets, people's faith in it will only grow. However, that means it is not immune, and should not be immune, from price corrections either. A significant price correction and the long term viability of Bitcoin as a major alternative currency are not mutually exclusive.”

It seems impossible to stop Bitcoin’s eventual momentum, but everything is moving rapidly and you can expect to see more wild fluctuations in the weeks and months ahead. One key trend will see nations bidding to impose stricter rules on the use of Bitcoin – Japan and South Korea are both in the process of clamping down on it, while India has declared it to be an illegal currency – so for every positive development, there is likely to be something in the world pegging it back. It is also heavily linked to the behavior of investors, who are withdrawing from risky assets and often switching to gold, the Swiss franc and bonds. If current negative trends continue, it is tipped by experts to collapse to $3,000 within weeks. But investors and bettors can take heart from its relative steadiness over the past week, and many will hope a period of flat performance prevails for a while longer.

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