Money

Bitcoin Prices: News And Noise

In every market, there’s news and there’s noise. The news is about major developments that change market conditions and eventually move prices. The noise is wishful thinking that caresses the ears of investors like the Sirens in Homer’s Odyssey, but has limited or no effect on prices.

The Bitcoin market is no exception to this rule.

There has been plenty of news lately. Like the ban of Initial Coin Offerings (ICOs) and the ban on Bitcoin trading by Chines authorities. China is a big market for Bitcoin. That’s why this news crushed Bitcoin prices.

Or the news that Japanese authorities are considering regulating the Bitcoin exchanges. Japan is another big market for Bitcoin, and this news has instilled confidence in the digital currency, helping it to recover.

Coin % 24H % 7d
Bitcoin (BTC) 2.36 4.32
Ethereum (ETH) -2.48 1.74
Litecoin (LTC) -1.72 -4.21

*As of Monday, October 9, 2017, at 10.15 am. Source: Coinranking.com

Meanwhile, there has also been a lot of noise.

Like a story last week that Goldman Sachs is expanding into Bitcoin trading, which had little impact, if any, on Bitcoin prices. Apparently, Bitcoin traders didn’t believe the story, as there’s a big difference between considering a new business and committing the energies and resources to develop it. That could explain why Goldman Sachs never returned my call to confirm and comment on the story that circulated social media.

Then there’s the story about IMF using Bitcoin instead of dollars in its financial dealings. Why is it noise? Because there’s no explicit statement from IMF that such a proposal is on the table. Besides, those who circulate these “news” items ignore basic facts about IMF and currencies.

As previously explained here, big governments will never let Bitcoin become a major currency, because they will have to give up segniorage income – the benefits associated with printing money.

That’s especially true for the American government, which derives segniorage income from printing dollars that are used as international currency — and for IMF, which is an institution controlled by America.

Investors in Bitcoin should be reminded that day-dreaming isn’t a strategy. They should learn to separate the news from the noise.

This story originally appeared on Forbes. Image courtesy of Shutterstock.

A Pakistani walks in the main hall of a church following a suicide attack in Quetta, Pakistan
Suicide Bombers Kill Nine At Christian Church In Pakistan [Video]
Firefighters from Kern County, Calif.
Flames Threaten Rich California Enclave, Residents Flee [Video]
The AFP Assistant Commissioner Neil Gaughan speaks to reporters about the arrest.
Australian Police Charge Man Of Acting As Economic Agent For North Korea [Video]
One of two bodies is removed from the home of billionaire founder of Canadian pharmaceutical firm Apotex Inc
Apotex Billionaire And Wife Found Dead In ‘Suspicious’ Case [Video]
How to start a business
How To Start A Business Online [Video]
The price of one Bitcoin neared $20,000 across many exchanges
As Bitcoin Flirts With $20,000, Let’s Revisit Its Earlier Crashes [Video]
The Road to Recognition Infographic
Personal Branding A To Z [Infographic]
EU Justice Commissioner Jourova holds a news conference in Brussels
EU Agrees Clampdown On Bitcoin Platforms To Tackle Money Laundering
How infographic can benefit your business
How Infographics Can Help Your Business [Infographic]
Content marketing
Visual Gold! The New Revolution Of Content Marketing [Infographic]
Infographic Online Reviews
Everything You Need to Know About Online Reviews [Infographic]
How to Effectively Curate Content Infographic
How To Do Content Curation Effectively [Infographic]
Twitter
Twitter’s Launching Its Native Tweetstorm Feature, Called ‘Threads’
Money on Facebook
How To Make Money On Facebook [Infographic]
Facebook Updates
Facebook Opens AR Studio To All Creators
Hashtags
Instagram Announces New Option For Users To Follow Specific Hashtags
Famous and rich
Morning Habits Of The Rich And Famous [Podcast]
Mindset mastery
4 Things You Need To Know About Forming A Success Mindset
How to overcome fear
How This Brain Trick Can Destroy Your Fear And Replace It With Confidence [Video]
10 ways to motivate yourself
10 Ways To Motivate Yourself When You’re Really Not Feeling It