Well it’s been a heck of a month with so much going on in the cryptocurrency space.
I’ve been extra busy with trading and other activities so this review will have to be somewhat shorter than I would have liked.
Bitcoin & Cryptocurrency Review July-August 2017
So what’s been happening in the cryptocurrency space…
First off, Bitcoin started July at around $2400. By the end of July it had risen to $2700. 15% rise. Nothing special. It peaked in the third week of July at around $2800 before then falling over the next few days back down to $2400.
This was followed by a further stab at $2800 once again, and then settled at around $2700.
This market turbulence was caused by concern over the upcoming Segwit changes, followed by the Bitcoin Cash announcement which came as a surprise to many as it was assumed up to that point that there would be no blockchain hard fork.
But as of August 1 the Bitcoin blockchain forked. So we now have two Bitcoin systems. The new Bitcoin is known as Bitcoin Cash or BCC, not to be confused with Bitcoin Connect which is another altcoin entirely.
Most exchanges have issued statements saying they will not be supporting or offering facilities for the trading of BCC at least not for the time being. BCC is currently trading on Bittrex at around 1 BCC = 0.102 BTC.
While all this was going on we also experienced a bear market in the latter part of July. Throughout mid July to early August many altcoins saw substantial falls in value.
Since then (second week of August) there’s been some recovery and it could be that the depressed altcoin market and falls of the last few weeks in altcoin values are now coming to an end.
BTC Trading In July 2017
During the first week we had sideways trading between a band of around $2400 to $2600, tending towards the upper end.
Into the second week and by mid July saw falls down to $1900. This dip was very short-lived and within 24 hours a rise had begun taking BTC back up to $2800, representing a rise in value of around 45% from dip to peak. This peak largely held from 22 to 24 July before falling by July 27 to $2400.
This was followed by subsequent rises to $2800 once again, followed by sideways trading in a band between approximately $2800 and $2650 over the last days of July.
Overall, Bitcoin has seen a 30 day rise of around 12% for July 2017.
What’s The Outlook for Bitcoin in August 2017?
On the Upside…
We’ve had a sudden surge in Bitcoin value from around $2700 at the start of August to an all time high of over $4000 by August 13, a rise of over 45%. There have been fallbacks of $100-$200 along the way which are inevitable and probably healthy. BTC seems to be able to recover pretty well so far after each fall back.
Where does Bitcoin go from here? Is this 50% growth in just 2 weeks sustainable? Will we see a further 50% growth on top of that during the second half of August?
It’s possible, but maybe not quite so likely. An initial fallback and consolidation could occur in the meantime. But I feel the outlook is positive on the whole. The uncertainties surrounding segwit and the Bitcoin fork are at least for now out of the way.
There’s increasing awareness of blockchain technology and cryptocurrency potential among mainstream financial institutions including even central banks in many countries. This can only be positive for Bitcoin as a whole.
On The Downside…
On the downside, there’s the possibility of another fork in Bitcoin later this year, possibly around November time, and this may unsettle the market as time draws on.
August also saw the closure of the BTC-e Bitcoin exchange, apparently due to US-directed action on account of inadequate or absent KYC/AML enforcement on the exchange.
The sector also saw the closure of AlphaBay and a number of other similar ‘dark web commerce’ sites.
There appears to be a tightening of KYC/AML in the US with consequences for US-based exchanges as well as for exchanges which provide services to US residents. The official US government attitude towards Bitcoin, at federal level as well as variously at state level appears to be surprisingly hostile compared to attitudes in Europe. This will hamper the growth of the sector.
As for Bitcoin Cash. This saw a very short-lived initial price peak, which has since been followed by a steady drift downwards. On Bitfinex, as of August 13, BCC is currently trading at BTC 0.0757 and USD $309, in other words well under 1/10th of the Bitcoin price.
What’s The Outlook For Alts in August?
Is the recent bear market for Alts now over?
We’ve seen substantial downward value corrections after the extended bull market which reigned throughout most of the first half of this year, so there’s a reasonable case for saying that this could now be over.
We could be seeing a new phase of growth in values across the sector. Many altcoins have seen some value growth this last week, but others are still in the doldrums.
July-August 2017 Hedge Fund Trading Results
How has the hedge fund fared during July and into August 2017?
In BTC terms, the fund’s total value was down some 24% for July. We finished the month with a slight rise in Bitcoin price in Euro, which meant that overall, in Euro terms, fund valuation was down just 2.97% for July, making this the worst month we’ve had so far this year.
In the first week of August, the fund lost a further 5% in Bitcoin value, but rises in fiat currency price meant that the fund was up in value in Euro terms by 25%. The second week has also seen a further substantial rise. But underlying Bitcoin/Altcoin value growth has been disappointing – either static or falling.
August was the month I began focusing on margin trading – mostly on Bitfinex, as well as futures trading on BitMex. I spent a couple of weeks dummy trading on BitMex, making reasonable profits, so decided to switch to live trading as I was missing out on value growth. So the fund is now trading live in Bitcoin futures and swaps.
Most of the trading for the fund outside of these two exchanges is being conducted on Bittrex. I’ve cut back and ceased practically all trading on Poloniex, at least for the time being. I’m not happy with Poloniex’s customer support among other things.
I also have concerns as to whether they may fall foul of the current AML/KYC blitz which US authorities seem to be conducting on exchanges.
I have no problems with these matters, other than like many other people finding them a bureaucratic incumbrance and a nuisance, but I am wary of the present situation such as it is and I don’t want any disruptions to my business caused by ignorant politicians or bureaucrats.
One thing I’ve learned is that you can’t assume if one day you make say $1000, that it will be $1000 x 30 per month. Doesn’t work like that unfortunately. It is up and down, some days you make nothing, or you make losses, which can sometimes be substantial. Its an insecure business and living at best. You are out on a ship at sea and anything can happen at any time, every day brings something different.
I have a roadmap for where I want to get to which I have been putting it into practice. We’ve had setbacks along the way with the falls in some weeks like recently, but even when they are plotted on the chart they are irrelevant as the long term and indeed medium term increase in value and trading capital is firmly upwards. It’s sometimes a question of holding on best you can and keeping on course. The metaphor of a ship at sea throughout all weathers and sea conditions holds true.
One thing I have learned in investing is that there are always these black swan events which suddenly come along and upset everyone’s projections and calculations. Sudden earthquake or tsunami eg in Japan, credit crash, big corporate crash, Brexit, Trump, all sorts of things which you just can’t foresee. Or even if you think they are probably coming, you still don’t necessarily know when or to what extent they will impact. I guess the only way you can describe it is to ‘expect the unexpected’.
Well that’s all for this month’s crypto review round-up. Here’s wishing everyone a great month’s trading.
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