Cryptocurrencies Continue to Gain Popularity

Posted by Rob Moss
November 21, 2017

Self-Published

  1. Cryptocurrencies continue to make headlines led by the most famous and widely own digital currency, bitcoin. Prices of this cryptocurrency have skyrocketed and despite skepticism that bitcoin is for criminals and millennials, prices continue to shrug off bad news.  Cryptocurrencies are gaining popularity because the help deter fraud driven by blockchain technology which drives the transaction processing of all digital currencies.  Recent news, shows that this phenomenon is gaining traction and unlikely to go away soon.

    What is a Cryptocurrency?

    A cryptocurrency is an alternative currency that can be used to paid for goods and services.  Coinbase provides access to many cryptocurrencies including Bitcoin, ethereum, and litecoin. Cryptocurrencies have been gaining popularity and certain every day transaction such as purchasing a home and paying government debt have been recorded using bitcoin.  What makes cryptocurrencies so popular is that there is a finite amount of the product, so it cannot be diluted by a central bank, and that its recorded using blockchain technology which helps deter fraud.

    Blockchain Technology is Taking Hold

    Recently, Mastercard, filed a new patent with the U.S. Patent and Trademark Office, which focuses on a new payment method the credit card giant plans to use to record transactions. The goal is to ease payment settlement times, and produce a more robust record of historical transactions. The patent application shows how the company is planning on using ablockchain-based database capable of instantaneously processing payments, guaranteeing that merchants don’t need to wait days before receiving funds for their products.

    Additionally, the patent filings showthat the technology would help the company keep an ongoing record of these transactions, and be able to confirm that a vendor was actually paid after a particular sale. The information that would be stored using the blockchain technology and would include the transaction amount, a guarantee of payment, confirmation of the payment and the parties involved.

    Demand is Reflected in the Price

    The demand for bitcoin continues to soar and while there have been some robust pullbacks, the price has continued to follow an upward trend. Prices have rising 3x since the summer, and is now trading above the 7,200 mark.  The current pattern is a pause that refreshes higher, and there does not seem to be any catalyst at the momentum to hold prices back.

    Volatility if Prevalent

    What is clear is that there is also definitely price volatility.  In a 4-day period in early November, prices tumbled more than 25%.  While this might have deterred many investors, demand just continued to show strength pushing prices higher forming a bull flag pattern which is a pause that refreshes higher. In early November prices were also overbought as the relative strength index (RSI) which is a momentum oscillator that measures accelerating and decelerating momentum, was printing a reading above 80, well above the overbought trigger level of 70, which foreshadowed a correction which ensured. The current reading of 60, is in the middle of the neutral range.

Youth Ki Awaaz is an open platform where anybody can publish. This post does not necessarily represent the platform's views and opinions.