President Donald Trump’s decision to criticize Bitcoin on Twitter Thursday left fans of the cryptocurrency giddy. Yes, the president said that Bitcoin was “based on thin air,” but at least he noticed Bitcoin. And that, proponents say, means it has arrived.
The price jumped over the next day, registering a one-day gain of 6.5% Friday. But that initial strength faded fast as Bitcoin fell hard over the weekend. After trading at nearly $12,000 on Friday night, it briefly fell below $10,000 on Sunday before rebounding on Monday morning to $10,580.
There was no obvious immediate cause, but it’s one more sign that Bitcoin is becoming much more volatile as the price rises. After starting the year in a tight range around $4,000, Bitcoin has approximately tripled in price, but there are days when it can rise and fall more than 5% at a time.
Some feel that government regulation will eventually be the death knell for crypto.
“If and when these crypto artifices ever become a threat to any nation’s currency then they will be outlawed in various countries, which is what I think is in the process of happening,” wrote Mark Grant, the chief global fixed income strategist at investment bank B. Riley FBR, in a note to clients last week. “In my opinion, the days of bitcoin are numbered.”
But Thomas Lee, managing partner at Fundstrat Global Advisors and a Bitcoin fan, thinks that the attention from the president is bullish.
“President Trump’s statement is ultimately a positive for crypto,” he wrote on Monday. “The crypto market is barely 1% of the global population and at best, 1-2% of the US population (we think estimates too high for crypto adoption). Hence, Trump’s statement triggers 98% of the U.S. (and world) to formulate a view on Bitcoin and crypto. If only 2% become believers, this doubles the crypto market—the math is staggering.”
Write to Avi Salzman at email@example.com