By Gaurav S. Iyer, IFC Published : October 4, 2017
Just one day after we heard reports of Goldman Sachs Group Inc (NYSE: GS) getting into Bitcoin services, the company’s CEO, Lloyd Blankfein, took to Twitter to clear the air.
A cursory reading of Blankfein’s tweet suggests that he’s on the fence, but investors should add historical context to his comments. Consider the history of Bitcoin news.
Here’s what he said:
It wasn’t too long ago that Blankfein and his pals thought Bitcoin was a joke. In fact, Jamie Dimon of JPMorgan Chase & Co. (NYSE: JPM) still thinks it’s a joke. He called it a “fraud” a few weeks ago. (Source: “JAMIE DIMON: Bitcoin is a fraud that’s ‘worse than tulip bulbs’,” Business Insider, September 12, 2017.)
What’s my point? Just that it’s a big deal when one of these guys takes Bitcoin seriously, and not only because it can affect the bitcoin price forecast. It means they’re paying attention to how blockchain is changing the world.
However, you can’t expect markets to move on subtext alone. BTC prices responded to the tweet by shedding 1.07% of Bitcoin’s market cap, driving the Bitcoin to USD exchange rate down to $4,266.12.
Although the fall in Bitcoin prices led the rest of the cryptocurrency market lower, it’s not as if the pain was equally distributed.
We know this because BTC dominance—a measure of Bitcoin’s market cap relative to the overall crypto market—pared back 20 basis points to 49.1%. Since it had shed 30 basis points the day before, we can conclude that Bitcoin is suffering more than other currencies.
The picture was just as lackluster when we looked at trading volumes. Only, $1.29-billion worth of Bitcoin changed hands yesterday, which is not great. It is not horrendous, of course, but it is far from ideal.
To give you a sense of perspective, $4.15-billion worth of BTC tokens changed hands on one day in the middle of September.
If Bitcoin suffered outsized pain this week, it’s because BTC had outsized gains last week. We don’t believe there is any reason to consider changing our Bitcoin price forecast for 2017, though we will continue to monitor the situation. So, for now, our Bitcoin price prediction still shows $5,000 by the end of the year.