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Friday, December 6, 2013

News from China: Banks and ISPs Told to Not Use Bitcoin

Many have speculated that much of the current Bitcoin (and Litecoin) pricing bubble has been caused by wild speculation in China. Well, that bubble may have just burst, so plan accordingly. Long-term, the outlook for Bitcoin and Litecoin is still good -- in fact, the outlook in some respects is even better now. China is telling banks not to accept Bitcoin because they are afraid of the inherent power in an unregulated (meaning, not controlled by the governments) currency that can be used without their consent.

Remember when someone stole 25,000 BTC from an account and BTC prices took a dive? Remember when the US came down on MtGox and closed Dwolla withdrawals, seized a bunch of money, and made wire transfers to/from the US very difficult? The price of BTC took a short-term hit and then recovered. Remember when Silk Road got closed down and the price of BTC plummeted, followed by a rise to new heights? Remember the previous two bubbles?

We've seen this all before. If you want to play the market, by all means: sell now while prices are high and hope to buy in at a lower price. How low will we go and when is the right time to buy back in? That's the real question.

As I've said before, we're going to see $1000+ BTC again at some point, probably within the next three months, but almost certainly in the next year. Given there will only be 21,000,000 BTC ever, I'd even go so far as to say we're likely to see BTC hit $50,000 USD or more within the next decade -- that would represent a market cap of $1 Trillion, which sounds like a lot but given it's potential use as a global currency free from government regulation, I'd say it's looking more and more likely. Every government that ends up in a debt crisis (Greece, Italy, etc.) is just lending more power to the idea of cryptocurrencies, and as the two most prominent citizens, BTC and LTC are set to reign supreme.

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