Bitcoin’s $4,300 rollercoaster: Where to begin?

Last week we wrote that bitcoin, the world’s number one digital currency, will hit Goldman Sach’s mark of USD4,000 (over N1.3 million) before December. Well, it turns out we did not have to wait for long, because last weekend, precisely on August 12, it happened!

Bitcoin is now worth $4,167 to one US dollar, a gain of nearly 17 percent since Friday. The average price of bitcoin across global exchanges on Sunday reached a height of USD4, 225 from the opening price of USD3, 917. As at press time, the price had surged to $4,300 on the CoinDesk Bitcoin Price Index.

Last year, if you fell among people that said it wasn’t worth investing money in when the price was still at USD800, you probably are having a change of mind today.

Nearly every explanation for the rise in price of bitcoin pointed towards investors’ confidence that impacted on price last week. Some analysts pointed to political and economic uncertainties in Europe and North Korea as contributors.

Another view was expressed by analysts at Bitcoin.com, who noted that the growing popularity in the US, Japan, China, South Korea and India could be a major factor. This view is corroborated by Google Trends analytics.

Finally, there is SegWit2x, a plan to quicken trade execution that involved moving some data off the main network, which was activated last week. Activating SegWit2x gave birth to a new version of the asset called Bitcoin Cash.

Therefore, for people who can summon the courage to invest now, and it is not too late, the confidence should be that bitcoin still has to beat Standpoint’s mark of USD5,000 or ShapeShift CEO’s prediction of USD10,000 in ten years.

To start investing, you will need to get a bitcoin wallet. But for security concerns we recommend you find a company that trades and sells bitcoin. There are some bitcoin exchange companies already operating in Nigeria like remitano, nairaex, bitkonga, bitssa etc.

You may also want to look towards ethereum which price at USD301 appears to be within reach. The bitcoin surge has had over 1.73 percent positive effect on it since last weekend.

There is also litecoin, which is presently the third most valuable digital currency apart from bitcoin and ethereum. As at the time of going to press it was at USD46.57. Analysts at Cointelegraph see a rise in demand and hence, increase in price for this crypto, as more investors begin to look favourably on the digital currencies.

However the challenge with litecoin is that it is not being traded in Nigeria yet, unless you are in the United States at the moment.

If you are still in doubt, it might interest you to know that the Nigerian government is accelerating knowledge and discussion on blockchain and cryptocurrencies starting with a national conference that was 100 percent focused on the new industry. That conference commenced on Monday 14th August and ended on Tuesday 15th August 2017.

For those who have latched on to the digital currency revolution already and may want to cash in on the milestone, it might pay well to remember the 20-30 rule for long term investments in cryptocurrencies. It simply says when you are considering how much to leave in your bitcoin wallet, just leave 20-33 percent of your bitcoin assets in and just forget about it.

 

FRANK ELEANYA