Cryptocurrencies were once the ‘bad boys’ of finance, traded on the Silk Road rather than Wall Street. But adoption by futures traders will ensure new found respectability for Bitcoin and push its value to five digits within months, argues David Jinks, Head of Consumer Research at e-commerce fulfilment experts ParcelHero. He is lead author of 2030: Death of the High Street, and appears regularly on national radio and in the national press discussing the impact of e-commerce; the rise of cryptocurrencies and the potential consequences of Brexit for exporters.
Back in mid-September, when Bitcoin’s value fell to a ‘mere’ $1,200 thanks to the Chinese crackdown, it looked as if Bitcoin’s dark-web past was coming back to haunt it. There’s no getting round the fact that many cryptocurrencies originally grew in value because of their use buying on the dark web. Larry Fink, CEO of BlackRock, called bitcoin an “index of money laundering.” And Jamie Dimon, CEO of JPMorgan said in September: ‘If you were a drug dealer, a murderer, stuff like that, you are better off doing it in bitcoin than U.S. dollars,”
But then something happened to reverse Bitcoin’s declining fortunes. In October rumours that Amazon would finally relent and accept Bitcoin, perhaps making an announcement in their October 26 Q3 results meeting, helped drive up the value of a Bitcoin right back up, to a then record $5,800. The speculation was fueled by a global petition on Change.org, urging ‘Amazon.com should accept Bitcoin and Litecoin cryptocurrency as payment methods ASAP’.
Investors such as James Altucher, the American hedge fund manager and venture capitalist, stated: “I’m certain that Amazon will accept Bitcoin. They have no choice. And this will be the tipping point that will create massive generational wealth unlike we’ve ever seen before.”
But why would mere rumours that Amazon was about to accept the cryptocurrency help turn around its value? We all know most Bitcoin owners are certainly not actually spending their digital currency today, whether on drugs or household appliances! The majority see it as an investment. As I mentioned in a Daily Express article early in November: the more mainstream a digital currency becomes; the more it will gain in value. With the value of a Bitcoin soaring to over $7,000 it’s not hard to see why.
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