MAY 2018 The Rise and Fall of Bitcoin - Loans€¦ · Often with nothing more than pie-in-the-sky...
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The Rise and Fall of Bitcoin MAY 2018 Source: Price data from Coindesk.com At the end of 2017, bitcoin and other cryptocurrencies burst into the mainstream consciousness with almost unreal price gains and promises of technological revolution. Often with nothing more than pie-in-the-sky ideas, many cryptocurrency projects were suddenly worth billions of dollars, with investors seeing no limit to how high prices could go. But then, almost as fast as they went up, bitcoin and many other cryptocurrencies came crashing down. With newsbreaks of government crackdowns, exchange hackings, and fake projects investors ran for the door, leading many economists to make comparisons to the tulip mania of the 1600s and the dot-com bubble of the early 2000s. However, it remains to be seen if the current downtrend is a permanent feature, or if it is just one of the many boom and bust cycles the cryptocurrency markets have experienced. As more regulatory framework is put in place and more crypto-projects turn into working products, the wild-west days of cryptocurrency will come to an end and clarity around value will emerge. Aug. 2017 Dec. 2017 Apr. 2018 Dec. 16, 2017: $19,343 Bitcoin hits all-time high. Dec. 10, 2017: $15,036 Chicago Board Options Exchange (CBOE) launches bitcoin futures, which allow investors to bet against the price of bitcoin. Dec. 18, 2018: $18,960 Chicago Mercantile Exchange (CME) launches bitcoin futures. Jan. 10, 2018: $14,890 Rumors of South Korea cryptocurrency exchange ban. Jan. 30, 2018: $10,035 Facebook announces ban on cryptocurrency and Initial Coin Offering (ICO) ads. Sept. 10, 2017: $4,991 News breaks of China cryptocurrency exchange ban. Sept. 12, 2017: $4,148 JPMorgan CEO Jamie Dimon calls bitcoin a “fraud”. $20,000 $18,000 $16,000 $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 Feb. 1-4, 2018: $8,186 Several large U.S. banks ban credit card purchases of cryptocurrencies. Nov. 19 - 26, 2017: $9,326 Coinbase, the largest U.S.-based cryptocurrency exchange, adds 300,000 new customers over Thanksgiving break. Jan. 4, 2018: $15,155 Binance, the world’s largest cryptocurrency exchange halts new user sign-ups, citing too much demand. Nov. 30 - Dec. 7, 2017: $16,858 Bitcoin rises 70 percent in 8 days. What’s next for the future of Bitcoin and cryptocurrency? Increased regulatory scrutiny and clarity. More institutional investor involvement. Continued differentiation between cryptocurrencies and blockchain technology. Many cryptocurrency projects will fail.
Transcript of MAY 2018 The Rise and Fall of Bitcoin - Loans€¦ · Often with nothing more than pie-in-the-sky...
The Rise and Fall of Bitcoin MAY 2018
Source: Price data from Coindesk.com
At the end of 2017, bitcoin and other cryptocurrencies burst into the mainstream consciousness with almost unreal price gains and promises of technological revolution. Often with nothing more than pie-in-the-sky ideas, many cryptocurrency projects were suddenly worth billions of dollars, with investors seeing no limit to how high prices could go. But then, almost as fast as they went up, bitcoin and many other cryptocurrencies came crashing down. With newsbreaks of government crackdowns, exchange hackings, and fake projects investors ran for the door, leading many economists to make comparisons to the tulip mania of the 1600s and the dot-com bubble of the early 2000s. However, it remains to be seen if the current downtrend is a permanent feature, or if it is just one of the many boom and bust cycles the cryptocurrency markets have experienced. As more regulatory framework is put in place and more crypto-projects turn into working products, the wild-west days of cryptocurrency will come to an end and clarity around value will emerge.
Aug. 2017 Dec. 2017 Apr. 2018
Dec. 16, 2017: $19,343Bitcoin hits all-time high.
Dec. 10, 2017: $15,036Chicago Board Options Exchange (CBOE) launches bitcoin futures, which allow investors to bet against the price of bitcoin.
Dec. 18, 2018: $18,960Chicago Mercantile Exchange (CME) launches bitcoin futures.
Jan. 10, 2018: $14,890Rumors of South Korea cryptocurrency exchange ban.
Jan. 30, 2018: $10,035Facebook announces ban on cryptocurrency and Initial Coin Offering (ICO) ads.
Sept. 10, 2017: $4,991News breaks of China cryptocurrency exchange ban.
Sept. 12, 2017: $4,148JPMorgan CEO Jamie Dimon calls bitcoin a “fraud”.
$20,000
$18,000
$16,000
$14,000
$12,000
$10,000
$8,000
$6,000
$4,000
$2,000
$0
Feb. 1-4, 2018: $8,186Several large U.S. banks ban credit card purchases of cryptocurrencies.
Nov. 19 - 26, 2017: $9,326Coinbase, the largest U.S.-based cryptocurrency exchange, adds 300,000 new customers over Thanksgiving break.
Jan. 4, 2018: $15,155Binance, the world’s largest cryptocurrency exchange halts new user sign-ups, citing too much demand.
Nov. 30 - Dec. 7, 2017: $16,858Bitcoin rises 70 percent in 8 days.
What’s next for the future of Bitcoin and cryptocurrency?
Increased regulatory
scrutiny and clarity.
More institutional investor
involvement.
Continued differentiation
between cryptocurrencies
and blockchain technology.
Many cryptocurrency
projects will fail.
ROBERT SPENDLOVEEconomic and Public Policy Officer
Contact our team for more information or to schedule a speaking engagement.
[email protected] (801) 560-5394
[email protected] (801) 844-7887www.zionsbank.com/economy
Additional Market Overview
STOCKS AND BONDS
Volatility Returns to the Stock Market
As of April 18, 2018
Target Federal Funds Rate
Prime RateNew Car Loan
48-Month
5-Year Adj Mortgage
(ARM)
15-Year Mortgage Fixed
30-Year Mortgage Fixed
Jumbo Mortgages
$417K+
Rate % 1.50 - 1.75 4.75 3.87 4.39 3.91 4.43 4.70
Yearly Change +0.75 +0.75 +0.57 +1.00 +0.64 +0.34 +0.10
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A division of ZB, N.A. Member FDIC As of April 18, 2018
Source: Wall Street Journal
Top 5* Cryptocurrencies: As of April 18, 2018
Price Yearly Change
Bitcoin (BTC) $8,063.35 +564.94%
Ethereum (ETH) $511.88 +912.62%
Ripple (XRP) $0.68 +2,166.67%
Bitcoin Cash (BCH)* $865.81 +55.75%*
Litecoin (LTC) $137.62 +1,247.89%Source: coinmarketcap.com*Ranking determined by market capitalization*Bitcoin Cash, percent change since 07/23/2017
COMMODITIES AND FUTURES
As of April 18, 2018 Yearly Change
Crude Oil 67.73 +24.64%
Natural Gas 2.78 -4.30%
Gasoline (RBOB) 2.06 +22.03%
Live Cattle 105.15 +1.55%
As of April 18, 2018 Yearly Change
Gold 1354.90 +4.21%
Silver 17.26 -8.97%
Corn 390.75 -3.97%
Wheat 486.50 -3.04%
Source: Federal Reserve Bank of St. Louis
INTEREST RATES
Source: Wall Street Journal
U.S. Government Bond Yields: As of April 18, 2018
Source: Wall Street Journal
Source: Wall Street Journal
