The price of a single bitcoin continued its climb upwards after lows last week. On Saturday morning, it even surpassed the $9,000 mark before paring back its gains. At 14:19 UTC on Monday, bitcoin was trading at $8,689.80 per pop, up 7.8% from its price 24 hours ago. That figure also represents a climb of approximately 25% from its price a week ago.
But investors shouldn’t expect miracles immediately. According to Dan Morehead, Pantera Capital founder, bitcoin’s price was 52 days into a 71-day bear market last week. “So it seems like another couple of weeks….and it (bitcoin price) could start grinding back up,” he said. Morehead has invested in 43 cryptocurrency-related companies.
Among the top 10 most-traded cryptocurrencies, Ripple announced an agreement with UAE exchange, which claims to have a 6.75% share of the $575 billion global remittance market, to test its blockchain technology. It is not clear whether Ripple’s cryptocurrency XRP is part of the agreement. (See also: Why Some Claim Ripple Isn't A Real Cryptocurrency). News about the agreement was enough to propel Ripple past the $1 mark it had been struggling to reach since Feb 1. As of this writing, Ripple was trading at $1.06.
The overall market capitalization for cryptocurrencies was $421 billion. On Saturday morning, it had reached a high of $458 billion.
New York Fed And JP Morgan Release Cryptocurrency Reports
In the beginning, Satoshi Nakamoto created blockchain and bitcoin.
Investment bank JP Morgan released a Bitcoin Bible that is an introduction and take on cryptocurrencies on February 9. The release followed a similar report made public by the New York Federal Reserve the same day.
Both reports summarized and analyzed the effect of cryptocurrencies on the monetary system. The New York Fed stated that cryptocurrencies will gain traction only in a dystopian world. Why, you ask? Because it represents a world where the authority of financial institutions is undermined and multiple cryptos will lay claim to being a medium of exchange. The statement is significant, given that New York is among the first states to establish regulations for cryptocurrencies in the form of BitLicense. (See also: 5 Most Bitcoin-Friendly States.)
The JP Morgan report mirrors the Fed’s assessment and predicts that it will difficult for cryptocurrencies to displace or compete with fiat currencies. The report also has some interesting statistics: the two bitcoin futures see $140 million in daily trading and the three largest cryptocurrencies average $550 billion in transactions, mostly conducted by individuals.
Coinbase Launches Commerce Button For Merchants
Speaking of transactions, North America’s largest cryptocurrency exchange, Coinbase, has announced a commerce button to enable businesses to accept cryptocurrencies. The new service, which is not open for signups, is called Coinbase Commerce and offers the options of transacting in Ethereum, Bitcoin, Bitcoin Cash, and Litecoin - the four cryptocurrencies listed on Coinbase.
Coinbase Commerce works in a manner similar to the merchant button for PayPal in that it navigates to Coinbase’s website to complete the transaction. The confirmation times and fees for payment (considering bitcoin’s clogged mining pool and variable transaction fees) are still unknown. That said, Coinbase's integration of SegWit in the coming weeks should enable faster transaction processing. (See also: Coinbase To Integrate SegWit: What It Means For You.)
Will it make a difference to traction and prices for the four cryptos? Based on precedent, maybe not. Merchants weren’t accepting bitcoin, according to a JP Morgan report last year. Even for those that were, bitcoin payments comprised a very small percentage of their overall payments volume. It seems that consumers were more interested in holding the cryptocurrency than transacting with it. Given the surge in cryptocurrency markets since, it is likely that their attitude may not have changed much.
Investing in cryptocurrencies and other Initial Coin Offerings ("ICOs") is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in 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 as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns small amounts of bitcoin.