Originally published in The Bitcoin BullBear Report released on 11/6/2015. Partial excerpt only. Written by @AKWAnalytics.
We have a few things we want to talk about to given the powerful rally we have seen over the past few weeks. There are a number of speculations as to what the cause of this rally has been, however none of them are the sole reason in our opinion.
First of all, lets talk about this MMM Ponzi scheme that folks are saying is driving the buying. If you don’t know, a rather famous Russian scamster has entered the cryptocurrency space using a pyramid scheme called MMM. apparently tens of thousands of innocent Russians, Eastern Europeans, East Asians, and South Africans are being told to send bitcoins to MMM and in return they get abnormal returns. While we will not rule this out as a contributing factor to the parabolic move above 500 $, thoughout the rally the market was still trading very technically. Institutions are the ones that know how to move price in a coordinated way across multiple exchanges. A Russian ponzi scammer, no matter how good he is at his craft, can’t. This news too will fade after some pain for those involved, but by no means does the short term future of bitcoin in any way rely on MMM (lol).
Next up is China, which appears to be a much more reasonable explanation for what has been going on. Avoiding currency devaluation and capital controls are perfectly legitmate use cases for bitcoin, and given the Chinese peoples familarity with bitcoin and predispositon for speculation in financial markets we think this was the cause of the bulk of the rally over the past month. Whether or not this continues at the current torrid pace remains to be seen (probably not), however we suspect that flows will continue into bitcoin and away from weak fiats.
Cheers,
@AKWAnalytics
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