The markets tumbled this week as the Dow reported its worst week with a 6.2 percent drop for the week and 4.7 percent fall since its opening in 2016. Bitcoin has advanced 6 percent with a more stable future for its valuation. Is the digital currency back?
After bitcoin fell in 2015 to a low of $183 and confidence wavered, bitcoin traded upward above $452 as the US markets closed on Friday. The loss this week to world markets was about $2 trillion dollars. The following markets closed on Friday:
The FTSE 100 fell 41.64 points or 0.7% to 5912.44
Germany’s Dax dropped 1.31% to 9849.34
France’s CAC closed down 1.59% at 4333.76
Italy’s FTSE MIB lost 1.58% to 19,869.49
Spain’s Ibex ended 1.66% down 8909.2
In Greece, the Athens market is 0.81% lower at 585.98
Shanghai Composite Index 3,186.78 has lost 9.97 % year-to-date
The volatile nature of bitcoin lost miners’ profit last year but the upswing in 2016 against the falling markets of the world has returned mining as a popular opportunity to gain money according to Bloomberg. Since miners are rewarded with bitcoin for mining to solve the complex equation and produce new coins, the mining of bitcoin in on the upswing again.
When bitcoin price dropped last year the cost of hardware, software and electricity drove out the miners from producing bitcoin. This year another challenge to face miners will be the change in bitcoins produced by half in the planned bitcoin production formula.
There is a strong case for mining and investing in bitcoin in 2016. George Soros sees certain asset classes mimic the markets prior to the 2008 sell-off and global meltdown. It is a consideration since this past August saw $2.1 trillion of value lost in U.S. stocks, and the VIX has hit its highest level in three weeks to date.
Gold has always been a flight to safety but Citigroup metals strategist, David Wilson states, “gold’s strength is probably going to be relatively short term.” Gold has moved up this week amidst market turmoil, hitting a 9-week high and breaking up through $1,100 an ounce. Gold, however, has had shaky performance. The ETF for Gold tracked down -28.33 percent in 2013, -2.19 percent in 2014, and -10.67 percent in 2015. The potential panic wave may cause investors to look to the other asset areas such as cryptocurrencies and bitcoin which emerged in the Satoshi whitepaper after the 2008 crisis.
Roger Ver, owner of Bitcoin.com, says the last seven years laid the ground work for Bitcoin adoption and start-ups. The infrastructure is in place. Ver says there is more reason to be optimistic about Bitcoin than ever before, and I think 2016 will be best year for Bitcoin yet.