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Congratulations! Bitcoin took out psychologically important $10,000 level and even extended way beyond that. It has happened a little earlier than we predicted in our last take on BTC/USD price action analysis. The current market cap is almost $181 billion, representing 55% dominance. This number has already rivaled market caps of renowned companies like IBM, Walt Disney and Philip Morris. Seems like to catch up with such a momentum one should give up on his sleep.

The price action alone forms a very positive outlook for the Bitcoin’s future. However, it is also a good idea to see how market is developing outside of the chart itself.

The pros

Total market capitalization of crypto currencies. In the beginning of the year this number was a mere $18 billion. Today, the crypto market is valued more than 18 times higher. This is a whopping $330 billion.
Continuing popularization of cryptocurrencies. There are a lot of tech hubs and camps around the world that organize free events of educational nature. I am not even mentioning paid seminars and forums, which are also becoming more and more common.
In addition to that mass media is building its new products around this topic. There is fresh episode of the “Big Bang Theory” series dedicated to Bitcoin coming out on November 30th. More retailers are expected to dive into this “new world”.
Even now, looking at the order book of Bitcoin one can see a countless stack of orders ranging from 50 cents to 50 dollars in value.
Interest and participation of credible investors. We have all heard a myriad of stories about a guy who bought bitcoins at 50 cents and became a multi-millionaire. Or we have even witnessed some bloggers make tens of thousands trading cryptos.
However, having Mike Novogratz, a figure accepted by the traditional investment elite, planning a $500 million hedge specializing in cryptocurrencies will “signal a growing acceptance of cryptocurrencies such as bitcoin and ether as legitimate investments”.
Moreover, “some of the most well-known figures on Wall Street, including Fundstrat’s Tom Lee and value investor Bill Miller, have warmed up to cryptocurrencies, more specifically to bitcoin”.
Government officials see potential in blockchain technology. Yesterday during his testimony on Capitol Hill, Federal Reserve chair nominee Jerome Powell mentioned that blockchain “may have significant applications in the wholesale payments part of the economy”.

The Cons

The biggest dictum against cryptocurrencies and Bitcoin in particular is it is exponential price growth. It is has become so widespread that people outside of the topic call it bubble (not sure though, if they know what they refer to).
There a lot of analysts calling the tops in Bitcoin; and no, it is not something new. People have been shorting S&P500 and Amazon for the past 3-4 years. Just have a look at those charts today.
However, Bitcoin growth rate is way larger over a much shorter period of time than that of other assets.
Unlike the tulips though, bitcoin has an underlying technology – blockchain, which is considered to have value and have great application in the foreseeable future.
With that being said, one of the biggest supporters of cryptocurrencies, Mr. Novogratz notes that “this is going to be the largest bubble of our lifetimes”. “Prices are going to get way ahead of where they should be. You can make a whole lot of money on the way up, and we plan on it.”

There is nothing wrong playing the crypto markets, but it is crucial to keep your eye on the bigger picture.

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