The China effect
China has seen a lot of activities surrounding its peculiar Bitcoin community, most recent of which is the suspension of withdrawals by two of the biggest exchanges within the ecosystem due to regulation concerns. Despite the frequency of activities and news that has made the Bitcoin and altcoins market very volatile, players insist that there is a lot more to be seen within the space even as the year goes by.
Director at BitLox, Dana Coe, notes that so far in 2017 the regulatory tightening with respect to Bitcoin exchanges in China has been significant. However, he explains that the phenomenon is a bit of a conundrum, saying that governments have no reason to fear Bitcoin as a capital flight path.
“Truly, if someone takes RMB and buys Bitcoin, does this have any influence whatsoever on the RMB? The money stays in the country, no capital reserves of foreign currency are depleted and the velocity of currency use is increased (this is acknowledged by all economists as a good thing).”
Coe notes that most of the regulatory action is in cracking down on what they perceive as overextending credit for speculative behavior, which in the real sense, is a thing that will correct itself.
He explains that as long as the governments make clear that losses are individual traders' responsibilities and that the markets are transparent, regulation will not be a permanent threat to Bitcoin.
Bitcoin price trend remains upwards
Bitcoin Investor and technical analyst Jonathan Millet believes that there will be a significant upward pressure on the Bitcoin price in March 2017. His prediction is based on the perception of the public towards the resumption of Bitcoin withdrawals at the Chinese exchanges and the ETF decision.
Millet also thinks that many more countries will become involved with Bitcoin regulation as the year continues. He notes that this is a positive development which reveals that Bitcoin is becoming more legitimate and welcome into the mainstream.
However, Millet envisages yet more significant increases in Bitcoin price by the end of 2017.
“Through the rest of 2017 we will see continued adoption, more mergers and acquisitions and there is a consensus by most leading developers and Bitcoin technical analysts that price will be between $2000-$3000 at the end of 2017.”