Bitcoin bust or boom in 2014?

It is rather fashionable to make predictions on all manner of things at the start of the year, unfortunately such predictions mostly seem laughable when next year rolls around. However, that doesn't seem to dissuade people from continuing to make such predictions. So we at Decrypter have decided to partake in this silly ritual of sorts and make our predictions on bitcoin for 2014. Before we make our humble predictions on bitcoin, we first present our audience the opinion of Byron Wien, the vice chariman of the Blackstone Advisory Committee. For those not in the loop, Blackstone is a private equity investment bank which  is valued at over $30 Billion USD.

Blackstone's Byron Wien predicts that BTC will collapse in 2014, in his own words:

2.      In 2½ years the price of a Bitcoin has increased from $25 to $975.  The supply of Bitcoins is fixed at 21 million with 11.5 million in circulation.  Bitcoins lack gold’s position as a store of value over time.  During the year Bitcoin’s acceptance collapses as investors realize that it cannot be used as collateral in financial transactions and its principal utility is for illegal business dealings where anonymity is important.

Mr. Wien is entitled to his opinion of bitcoin, and we will not address any of his concerns or criticisms regarding bitcoin in this particular post. We will however provide our users with the undeniable fact that Mr. Wien's predictions were only 24% accurate for last year.

Our own predictions are not nearly as grim as that of the sagacious Mr. Wiener. We take into consideration that overstock.com will start accepting bitcoin this year, as well as Zynga. We anticipate more retailers to start accepting bitcoin in 2014 and increased broader acceptance. Our most conservative expectation is that bitcoin will surpass 2000 USD this year and will touch 3000 but will retreat from that high and hover somewhere in the mid 2000 value range. We have no doubt that our users will mark their calendars and dutifully check and track the accuracy of our prediction; making sure to remind us how wrong we were when 2015 is rung in. Best of luck trading!

Bullish start for crypto currency

BTC/USD

The recent apparent crash of alt crypto currencies may have some worried. However, it has been noted by many astute observers, that as BTC rises, Alt-Cryptos tend to fall but ultimately retain their previous value in fiat currencies. Let's take a quick look at recent market activity to confirm that this is indeed the case. In the first chart at the top, we can see a dramatic rise in BTC price during the first week of 2014. Certainly this can only be a good sign for an upcoming bullish year for BTC.

LTC/BTC

During the same time period we can see the LTC/BTC spread fall. But, before holder's of LTC panic, they should consult the LTC/USD chart below which confirms that the value of LTC in USD has actually risen modestly over the same period.

LTC/USD

Another very actively traded Alt-Crypto is WDC.  In the following chart we can observe the spread between WDC/BTC fall.

WDC/BTC

 Below we can confirm that WDC also experienced an actual increase in total value.

WDC/USD

We can quantify the market movements in the first week of Jan 2014 as follows:

• BTC $740  - $907   [+18.4%]
• LTC $23.5 - $26.58 [+11.5%]
• WDC $0.46 - $0.49  [+06.1%] 

This is a good start to 2014 for crypto currencies. We leave further interpretation of these numbers as an exercise for our prodigious readers.

Best of luck trading!