Bitcoin in the News : 2019-10 More++

As summer is followed by autumn, so a Bitcoin in the News : 2019-10 Price post is followed by a review of news from the same month. Of the 90 or so bitcoin articles presented by Google News alerts, only 16 made my short list, making it a shorter short list than I can remember. Most of the other articles were about someone predicting a price: bitcoin will go {up / down / sideways}. Since anyone can predict anything about price movement, I tend to ignore these. One prediction that did make the short list was:-

• 2019-09-30: McAfee Explains ‘Rationale’ For Why He Still Sees $1 Million Bitcoin By 2020 (forbes.com)

I've seen this prediction before, but what's behind it? After some estimates about the 'real' number of bitcoins that are available -- "21 million bitcoins, 7 million of which have been lost forever" -- the argument goes like this:-

"In any case, just run some numbers," McAfee said. "If bitcoin gets to be 5% of world financial transactions, which, you all know it will," he said, even mentioning "maybe 10% or 20%," then bitcoin would be worth "$10 million per coin, based on those numbers." • "I’m just a very conservative man," McAfee said with a laugh. "I said one [$1 million] and I’m sticking to one."

'You all know it will.' We do? There are so many assumptions built into that argument -- 5% of financial transactions, the supply isn't expanded, nothing better comes along -- that it's based entirely on faith. By coincidence, another article a week later goes further into potential pitfalls.

• 2019-10-08: Two Bitcoin Developers Explain How The Cryptocurrency Could Still Fail (forbes.com)

The story mentioned a number of risks. The first two have been recognized for some time; the last two are less well known:-

51% attacks; government crackdowns; rules of the Bitcoin network are changed in favor of a more centralized model; an accidental bug

Finding no other stories as compelling as those two, I returned to the '2019-10 Price' post, where I identified two sharp moves and wrote, 'Apparently, no one understands the cause of these sharp movements.' I should know better than to make statements like that. There were three stories from Forbes.com that addressed the causes:-

• 2019-10-25: Bitcoin Has Crashed Again -- What Now? (forbes.com) • 'Bitcoin (BTC) is falling because China is closing with the U.S. on a trade deal.'
• 2019-10-25: Forget China -- Is This The Real Reason Bitcoin, Ethereum, Litecoin, And Ripple’s XRP Bounced? (ditto) • 'Bitcoin has swung wildly this week, as many had expected it to, with it losing $1,000 per bitcoin a few days ago before suddenly shooting back up earlier today. [...] Bitcoin volumes have been struggling recently, leaving the market especially vulnerable to so-called whales placing large orders or liquidating short positions.'
• 2019-10-25: Bitcoin Defies Death Cross, Surging Close To 20% (ditto) • '"China’s endorsement of blockchain technology helped Bitcoin recover, and along the way, a short squeeze helped push prices even higher," said Joe DiPasquale, BitBull Capital’s CEO.'

It's not clear to me why a China / U.S. trade deal is bad for bitcoin, but I'll watch for more clues. As for the other China connection, here's a story from a different source:-

• 2019-10-26: Bitcoin surges to over $10,000 in biggest single day move since April (marketwatch.com) • 'Since a 2017 decision by the People’s Bank of China, cryptocurrencies are banned in the country, although a digital renminbi is being developed by the central bank and likely to launch soon. China was one of the biggest sources of demand for cryptocurrencies during the 2017 bull run.'

Although an endorsement of blockchain technology doesn't necessarily lead to a lifting of a cryptocurrency ban, it's a step in the right direction. The explanation makes more sense than technical jabber like the so-called 'death cross' that pops up in so many negative analyses.