Bitcoin reaches two-week high Sept. 28 before pulling back

Posted Sep 28, 2017 by Ken Hanly
On Thursday the price of bitcoin reached a two-week high but then pulled back to the level it had reached the previous day. South Korea's 3 largest exchanges were pricing bitcoin below $4,000 US.
Bitcoin uses peer-to-peer technology to operate with no central authority or banks; managing transac...
Bitcoin uses peer-to-peer technology to operate with no central authority or banks; managing transactions and the issuing of bitcoins is carried out collectively by the network
Karen Bleier, AFP/File
As recently as last Sunday, September 24 bitcoin was trading below $3,700 but a rally during the week has lifted it above the $4,000 level. At its peak today its price reached $4,279 but dropped back later. In spite of pulling back, bitcoin is still headed towards a 10 percent rise for just the week. As mentioned, on Korean exchanges bitcoin was trading below the $4,000 level on several exchanges whose combined volume is 8 percent of bitcoins daily trading volume. The markets appear to be settling down after a selloff caused by China's outlawing of initial coin offerings (ICO's) and its announcement that cryptocurrency exchanges would be closed at the end of September. Over the counter sales between individuals can still continue and cryptocurrency mining is not impacted. The closure could be temporary.
A recent article suggests that bitcoins' rise in price may be in part due to actions by the internet retailer Overstock: "Bitcoin’s climb past $4,200 followed Overstock’s announcement that one of its subsidiaries has entered a joint venture to create the first SEC- and FINRA-compliant ICO marketplace, a move that will likely bring increased liquidity to the cryptocurrency markets and further legitimize cryptocurrency in the eyes of institutional investors. " "ICO"stands for initial coin offering a way cryptocurrency developers raise cash for their project.Overstock is a US-based on-line marketplace that at first specialized in liquidating the assets of failed companies. It has branched out into selling new products as well. In January of 2014 it began to accept payments in bitcoin for goods. In mid-2014 the company CEO Patrick Byrne announced that sales in bitcoin were about $300,000 per month. In September of the same year the company announced that it would dnoate 4 percent of bitcoin sales to foundations that were promoting cryptocurrencies. Malaysia and Bahrain have recently adopted a conciliatory stance towards cryptocurrencies. This may help the currencies expand in some developing countries. Some analysts think that if the price of bitcoin remains on average over $4,000 the next few days this could be a precursor for a bullish trend that could send it above its all-time high of $5,000
China is said to be studying the blockchain technology that underpins bitcoin in order to issue its own cryptocurrency. The Financial News, the mouthpiece of the People's Bank of China (PBOC) said that Beijing should “accelerate the process of launching a sovereign digital currency after it curbed risks of cryptocurrencies.” However, it is unlikely that such a coin would displace bitcoin as one of the main virtues for many users of cryptocurrencies is that they are not associated with governments. Recently rating agencies have downgraded China's sovereign rating as well.
Former stockbroker Jordan Belfort, called "Wolf of Wall Street" joined JP Morgan CEO Jamie Dimon in calling bitcoin a fraud saying that he thinks Dimon is correct. He claims that cryptocurrencies will gain a place in society only if they are backed by a central government. He thinks that bitcoins could be easily stolen from you by hackers. Belfort himself plead guilty to stock market fraud in 1999 and was in prison for 22 months.