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Bitcoin bounces back. Will it last?

Has bitcoin finally hit rock bottom? The price is back above $11,000, just a day after it bri...

Posted: Jan 24, 2018 5:03 PM
Updated: Jan 24, 2018 5:03 PM

Has bitcoin finally hit rock bottom?

The price is back above $11,000, just a day after it briefly dipped below $10,000. And millennials could be the reason for the rebound.

It's been a wild ride for bitcoin over the past year. The price surged more than 1,400% in 2017, topping out at nearly $20,000. But that led to worries that bitcoin may be a bubble and that investors are ignoring many risks.

Bitcoin has plunged nearly 20% this year because of concerns about a possible crackdown by South Korea and China and because of a warning from the SEC about its extreme volatility.

The big price fluctuations have also led Stripe, a digital payments company, to announce that it will soon stop processing bitcoin transactions.

Related: What is bitcoin?

A Stripe executive said in a blog post that bitcoin is now "better-suited to being an asset than being a means of exchange" -- a concern many analysts share. Currencies like the dollar, euro and yen don't move as wildly as bitcoin does. They are much more stable.

And UBS chairman Axel Weber told Bloomberg at the World Economic Forum in Davos, Switzerland, that the Swiss investment bank won't trade bitcoin because he is concerned that more regulations could cause a "massive" drop in the price.

That's a lot of bitcoin doom and gloom. So why has the price bounced back this quickly? Tim Hockey, the CEO of discount brokerage firm TD Ameritrade, has an interesting theory.

Hockey said during the company's earnings conference call Tuesday that there has been increased interest in "blockchain related securities, as well as cryptocurrencies in general" from its average investors, many of which are now younger millennials. Blockchain is the digital ledger that keeps records of transactions in bitcoin and other cryptocurrencies.

"Bitcoin and blockchain-related stocks have been more frequently among our clients' top traded stocks since November," he said. (Hockey said cannabis stocks were growing increasingly popular with traders as well.)

Related: Forget bitcoin -- here come the blockchain ETFs

Others think bitcoin will continue to rebound -- and even hit new highs. Dan Ciotoli, a software engineer and blockchain analyst with the research firm Bespoke Investment Group, told CNBC on Wednesday that the price of bitcoin could soar to $30,000 by year's end.

His rationale? Transactions for purchases involving bitcoin should continue to get faster and cheaper. So bitcoin will become a more viable form of payment, not just a hot momentum trade for what he called "get-rich-quick investors."

Still, bitcoin could be supplanted by other cryptocurrencies like ethereum and ripple if the processing kinks aren't worked out soon.

"There are signs that perhaps bitcoin is the victim of its own success," Daniele Bianchi, an assistant professor of finance with Warwick Business School in Britain, said in an email.

"Rising fees and longer transaction times are the natural consequence of the widespread increasing demand following the public hype and excitement surrounding it," Bianchi added. "This is bad news for the use of Bitcoin as a pure method of payment."

But he also said he doesn't believe there will be "epic crash" in the entire crypto world.

"The truth is that the increasing costs and processing times will spur interest in alternative coins and developments, rather than killing the aggregate demand," Bianchi said.

And that seems to be the consensus view of most on Wall Street -- even bitcoin bears. Few would deny the growth potential for digital payments and blockchain technology broadly. But bitcoin may not necessarily be the crypto that wins out in the end.

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 153270

Reported Deaths: 3807
CountyCasesDeaths
DeSoto10249104
Hinds10095199
Harrison7173111
Jackson6440124
Rankin5705103
Lee517095
Madison4902107
Forrest385986
Jones361788
Lauderdale3567147
Lafayette329752
Washington3197108
Lamar294750
Oktibbeha248462
Bolivar242484
Lowndes240464
Panola224852
Neshoba2225118
Marshall219450
Leflore206891
Pontotoc202429
Monroe201078
Lincoln192865
Sunflower191955
Warren177757
Tate175351
Union169526
Copiah165440
Pike163958
Yazoo157940
Scott156630
Itawamba155635
Pearl River153468
Alcorn152828
Coahoma151043
Simpson150353
Prentiss148431
Adams143151
Grenada141445
Leake138344
Holmes131561
Tippah126730
George126225
Covington124639
Winston123726
Hancock122840
Wayne119023
Marion117346
Attala116134
Tishomingo110042
Chickasaw108332
Newton107529
Tallahatchie97427
Clarke92453
Clay92327
Jasper83522
Stone78515
Calhoun77713
Walthall76929
Montgomery75425
Carroll73815
Lawrence72614
Smith72116
Yalobusha72028
Noxubee71917
Perry67726
Tunica61819
Greene60822
Claiborne58816
Jefferson Davis57817
Amite55214
Humphreys54319
Benton49618
Quitman4947
Webster45014
Kemper44218
Wilkinson40122
Jefferson35711
Franklin3485
Choctaw3457
Sharkey31717
Issaquena1174
Unassigned00

Alabama Coronavirus Cases

Cases: 247229

Reported Deaths: 3577
CountyCasesDeaths
Jefferson32718500
Mobile19904362
Madison13425148
Tuscaloosa13167154
Montgomery12380236
Shelby1046577
Baldwin882098
Lee778566
Morgan675150
Calhoun6366121
Etowah635166
Marshall630955
Houston532338
DeKalb489736
Cullman447442
Limestone430245
St. Clair425755
Lauderdale413354
Elmore409464
Walker3689111
Talladega353554
Jackson327123
Colbert314642
Blount294640
Autauga275142
Franklin254233
Coffee246515
Dale234454
Dallas226532
Chilton225038
Russell22313
Covington220334
Escambia198631
Chambers177250
Tallapoosa177091
Pike159214
Clarke158919
Marion141336
Winston134423
Lawrence129636
Pickens124218
Geneva12378
Marengo122524
Bibb118817
Barbour117511
Butler117342
Randolph103821
Cherokee102924
Hale97731
Fayette92216
Clay92024
Washington91619
Henry8676
Lowndes79929
Monroe79011
Cleburne77414
Macon74522
Crenshaw71230
Bullock70019
Perry6896
Conecuh68514
Lamar6838
Wilcox63918
Sumter58422
Greene42718
Choctaw42613
Coosa3464
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