By Gaurav S. Iyer, IFC Published : October 3, 2017
Although BTC slipped 3.74% on Monday, there is more than enough Bitcoin news to reenergize the price.
For example, Goldman Sachs Group Inc (NYSE:GS) is “weighing a new trading operation dedicated to Bitcoin and other digital currencies,” according to an exclusive report in The Wall Street Journal. (Source: “Goldman Sachs Explores a New World: Trading Bitcoin,” The Wall Street Journal, October 2, 2017.)
That’s pretty big news, because Goldman may have a tarnished reputation with the public, but it’s got grade-A street cred with the banking community. It could “bring the mountain” to Bitcoin, as it were, and force us to reevaluate our 2018 Bitcoin price forecast.
Although the plan is still preliminary, it’s mere existence is noteworthy. It was only a few weeks ago that Jamie Dimon of JPMorgan Chase & Co. (NYSE: JPM) called Bitcoin a “fraud.” He said it was “going nowhere” and will “eventually blow up.” (Source: “JAMIE DIMON: Bitcoin is a fraud that’s ‘worse than tulip bulbs’,” Business Insider, September 12, 2017.)
Apparently, he wasn’t speaking on behalf of Wall Street.
But Goldman wasn’t the only good news. Christine Lagarde, the head of the International Monetary Fund, also said that “it may not be wise” to underestimate Bitcoin, and that it could make “weak” countries more stable.
“Instead of adopting the currency of another country – such as the U.S. dollar – some of these [weak] economies might see a growing use of virtual currencies. Call it dollarization 2.0,” she said. (Source: “IMF’S CHRISTINE LAGARDE SEES CRYPTOCURRENCIES POTENTIAL FOR ‘DOLLARIZATION 2.0’,” Bitcoinist, October 2, 2017.)
Lagarde noted that digital currencies are still volatile and difficult to scale, but her overall tone was encouraging. Such optimism from high-ranking members of the global financial elite would normally send BTC prices rocketing, but we just came off a week-long rally.
As a result, the Bitcoin to USD exchange rate is down 3.74% to near $4,287.21.
To the untrained eye, this minor correction looks like a breather. Bitcoin prices blew past the $3,000 and $4,000 levels, which means there were obviously some folks who wanted to exit the market with their gains intact. That’s fine.
Now we’re looking for Bitcoin to gather support for a second run. It may take a day or two, but we believe the march to $5,000 is still happening. Therefore, we maintain our Bitcoin price forecast.