Bitcoin has been on a real ride for the last month or so. At time of writing, bitcoin is sitting at about $411, its highest price all year, and up 72% from $238 just a month ago. After spending most of the year skirting a new low, the price is on a steep rise.
So what’s the buzz? What’s been going on with bitcoin lately? Why the rise? And where is the price headed?
As crazy as it usually is to apply fundamentals analysis to bitcoin, let’s take a look:
Nasdaq announced it would be using bitcoin’s blockchain technology to power its system of private share sales. Many news reports have tended to refer to this as a “blockchain” project, and it is. But Nasdaq is using the bitcoin blockchain, probably because there’s no point in spending money to build “their own” blockchain when a more secure version is freely accessible.
The European Union
The EU issued a ruling recently that bitcoin must be treated like a currency for tax purposes, unlike the United States which has ruled it a commodity. The ruling means that bitcoin exchanges in the EU are exempt from VAT taxes. Besides removing the financial burden, this clears the air and offers legitimacy to bitcoin.
Among the most respected publications in the field of economics, The Economist ran a cover story on bitcoin on Halloween, though the story was dismissive of bitcoin in favor of its underlying blockchain technology.
Visa, Mastercard, and American Express
All three card payment networks have funded their own deals with bitcoin startups. This is not the watered-down “blockchain” talk, these companies are using bitcoin and the bitcoin blockchain for their projects.
USAA is partnering up with bitcoin service Coinbase to incorporate bitcoin into the USAA online banking interface. Customers of the banking and insurance giant will be able to link their Coinbase account to help better manage their finances by putting things all in one place.
About as establishment finance as they get, Blythe Masters was all over the financial news talking about blockchains, including a couple of prominent articles on Bloomberg. She definitely downplayed bitcoin, threw it under the bus even.Meanwhile her company is collecting blockchain startups like BlockStack, HyperLedger, and Bits of Proof.
The Gemini exchange founded by the Winkelvoss twins, opened for trading, avoiding the BitLicense by becoming a bank of sorts. If nothing else, the exchange builds momentum to the day their bitcoin ETF gains regulator approval.
There’s a flood of interest in fintech lately, as demonstrated by the crowds at Money20/20 and all the investment money going into incubators and startups. Bottom line, the most interesting fintech these days is blockchain fintech, and now that banks are clued in, they are buying up companies left and right.