Bitcoin, it would seem, has lost its sparkle.
CNBC are reporting that Google searches for “bitcoin” have fallen 75 percent since January – a statistic suggestive not only of a lack of interest in the world’s largest cryptocurrency, but also of a lack of new buyers.
At $7,700, bitcoin is trading at a 55 percent discount to levels in January; likewise, volatility is a shadow of its former self, with trading ranges averaging just $340 per day, from levels near $2,000 per day earlier in the year.
“If things don’t turn around soon for bitcoin, the cryptocurrency could go the way of Los Del Rio or Soft Cell – one-hit wonders whose impact changed the global scene forever, but which ultimately weren’t a part of the future of their industry,” warns Finance Magnates’ Rachel McIntosh.
Among those remaining bullish on bitcoin is Fundstrat co-founder Tom Lee.
Speaking on CNBC’s Fast Money program on Wednesday, Lee said that web searches “aren’t the leading indicator for bitcoin…and therefore shouldn’t be looked to as some sort of price predictor.”
Lee is forecasting bitcoin at $25,000 by year-end, twice that expected by investment research firm Trefis, which recently lowered its year-end forecast to $12,500 on the grounds of declining transaction volumes.
In other news, the Mexican peso slid on Wednesday to its weakest level in fifteen months, at 20.49 per US dollar. It recovered in the New York session to 20.30 but remains down 12 percent since mid-April.
The peso – the tenth most traded currency in the world – continues to be buffeted by speculation surrounding NAFTA. Recent reports suggest that US President Donald Trump is “seriously considering” abandoning NAFTA altogether and pursuing separate trade deals with Mexico and Canada. Other concerns for the peso include above-target inflation, as well as higher US interest rates and the stronger dollar, both of which make Mexico’s foreign loans more expensive to repay.
Complicating NAFTA negotiations was last week’s decision by the US to impose tariffs on Mexican and Canadian steel and aluminium products – a decision which led to both countries retaliating with tariffs of their own. Further complicating negotiations will be Mexico’s looming general election, scheduled for July 1st.
Given the prevailing uncertainties over trade, Mexico’s central bank will be reluctant to raise interest rates to support the peso.
Currency rates were extremely volatile last week as the coronavirus situation worsened day by day with various countries implementing ever-tougher measures to stop the spread of the disease.
Last update: 23 Mar, 2020
This week the US Dollar was touching three-year highs when valued against a basket of major currencies. The greenback’s traditional role as one of the safe-haven currencies is helped by a domestic economy that is largely immune to the threats of the coronavirus.
Last update: 22 Feb, 2020
The strong start to the year for “risk-on” currencies is already a distant memory.
Posted: 3 Feb, 2020